Registration No. 333-115816

                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

             POST-EFFECTIVE AMENDMENT NO. 2 ON FORM S-3 TO FORM SB-2

             REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                                BIOENVISION, INC.
                 (Name of small business issuer in its charter)

          Delaware                         2834                  13-4025857
          --------                         ----                  ----------
(State or other jurisdiction   (Primary Standard Industrial   (I.R.S. Employer
     of incorporation or        Classification Code Number)  Identification No.)
        organization)
                                 345 Park Avenue
                                   41st Floor
                            New York, New York 10154
                                 (212) 750-6700
          (Address and telephone number of principal executive offices
                        and principal place of business)

                               David P. Luci, Esq.
                   Chief Financial Officer and General Counsel
                                Bioenvision, Inc.
                                 345 Park Avenue
                                   41st Floor
                            New York, New York 10154
                                 (212) 750-6700
            (Name, address and telephone number of agent for service)

                                    Copy to:
                            Luke P. Iovine, III, Esq.
                      Paul, Hastings, Janofsky & Walker LLP
                               75 East 55th Street
                               New York, NY 10022
                                 (212) 318-6000

Approximate  date of commencement  of proposed sale to the public:  From time to
time after the effective date of this Registration Statement.

If the only securities  being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. |_|

If any of the  securities  being  registered on this Form are to be offered on a
delayed or continuous  basis  pursuant to Rule 415 under the  Securities  Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the  Securities  Act  registration  statement  number of the  earlier  effective
registration statement for the same offering. |_| __________

If this Form is a  post-effective  amendment filed pursuant to Rule 462(c) under
the  Securities  Act,  check  the  following  box and  list the  Securities  Act
registration  statement number of the earlier effective  registration  statement
for the same offering. |_| ___________

If this Form is a  post-effective  amendment filed pursuant to Rule 462(d) under
the  Securities  Act,  check  the  following  box and  list the  Securities  Act
registration number of the earlier registration statement for the same offering.
|_| ___________

If delivery  of the  prospectus  is  expected  to be made  pursuant to Rule 434,
please check the following box. |_|

                         CALCULATION OF REGISTRATION FEE

                         Number       Proposed        Proposed
Title of each class     of shares      maximum         maximum        Amount of
of securities to          to be     offering price    aggregate     registration
be registered          registered     per share     offering price      fee
-------------          ----------     ---------     --------------      ---

Common Stock,
par value $.001
per share             30,164,746(1)      (2)              (2)           (2)

(1)     Represents an aggregate of 30,164,746  shares of Common Stock previously
        registered pursuant to Registration Statement on Form SB-2 (Registration
        No.  333-115816)  that are being carried forward in the Prospectus filed
        with this Registration Statement.

(2)     This  amount  has  previously   been  paid  by  the  registrant  as  the
        registration  fee for the  30,164,746  shares  of Common  Stock  carried
        forward from the prior Registration Statement on Form SB-2 (Registration
        No. 333- 115816).

Pursuant to Rule 429 under the Securities  Act, the prospectus  included as part
of this registration statement shall be deemed a combined prospectus which shall
also  relate  to our  registration  statement  on Form  SB-2  (Registration  No.
333-115816)  and  constitutes  a  post-effective  amendment to our  registration
statement on Form SB-2 (Registration No. 333-115816).

The registrant hereby amends this  Registration  Statement on such date or dates
as may be necessary to delay its effective date until the registrant will file a
further amendment which  specifically  states that this  Registration  Statement
will  thereafter  become  effective  in  accordance  with  Section  8(a)  of the
Securities  Act of  1933  or  until  this  Registration  Statement  will  become
effective on such date as the Commission,  acting pursuant to said Section 8(a),
may determine.




The  information  in this  prospectus  is not complete  and may be changed.  The
selling  shareholders  may not sell  these  securities  until  the  registration
statement filed with the Securities and Exchange  Commission is effective.  This
prospectus is not an offer to sell these  securities and it is not soliciting an
offer to buy these  securities  in any  state  where  such  offer or sale is not
permitted.



Prospectus          Subject to completion, November 16, 2004




                               [GRAPHIC OMITTED}




                                BIOENVISION, INC.

                        30,164,746 shares of common stock

        Of the shares of stock covered by this prospectus:  (i) 5,121,613 shares
were  issued to  former  stockholders  of  Pathagon  Inc.  in  February  2002 in
connection  with  the  consummation  of the  acquisition  of  Pathagon  Inc (ii)
5,440,000  shares  were  issued or are  issuable  upon the  exercise of warrants
issued  to  preferred  stockholders  in  connection  with  a  private  placement
consummated in May 2002; (iii) 6,000,000 shares are issuable upon the conversion
of 3,000,000  preferred  shares  issued in connection  with a private  placement
consummated in May 2002, (iv) 1,008,333 shares are issuable upon the exercise of
warrants issued to our financial  advisor in connection with a private placement
consummated in May 2002; (v) 3,668,559  shares were issued and 3,644,698  shares
are  issuable  upon  the  exercise  of  warrants  and  options   issued  to  the
co-founders,  early round investors and certain former  consultants and advisors
for services  rendered to or on behalf of us; (vi) 44,166 shares were issued and
133,332  shares are issuable  upon the  exercise of warrants  issued to a former
co-development  partner for services  rendered to us; (vii) 1,500,000 shares are
issuable  upon the  exercise  of  warrants  issued in  connection  with a credit
facility  secured by  Bioenvision  in November  2001;  (viii) 160,000 shares are
issuable upon the exercise of warrants issued to two former  financial  advisors
in March,  2004; (ix) 130,277 shares issued to a regulatory  consultant in April
of 2003 for services  rendered;  (x) 2,532,898  shares were issued in connection
with a private placement  consummated in March and May of 2004; and (xi) 780,870
shares are issuable upon the exercise of warrants  issued in connection with the
private placement consummated in March and May of 2004.

        All of the shares of stock covered by this  prospectus are  beneficially
owned by the  selling  stockholders  listed in the  section  of this  prospectus
called  "Selling  Stockholders."  We are not  selling any of the shares of stock
covered by this  prospectus  and we will not receive any proceeds from any sales
of our stock covered by this prospectus effected by the selling stockholders.

        Our common stock is included for quotation on the Nasdaq National Market
under the symbol  "BIVN".  The last reported sales price of shares of our common
stock on November 9, 2004, was $8.86 per share.

        We urge you to read  carefully the "Risk Factors"  section  beginning on
page 4 where  we  describe  specific  risks  associated  with an  investment  in
Bioenvision and these securities before you make your investment decision.

        Neither the Securities and Exchange  Commission nor any state securities
commission has approved or  disapproved  of these  securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.

               The date of this prospectus is November ___, 2004.










                                TABLE OF CONTENTS


                                                                            Page


PROSPECTUS SUMMARY............................................................1

THE OFFERING..................................................................3

RISK FACTORS..................................................................4

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS..............................14

USE OF PROCEEDS..............................................................14

SELLING STOCKHOLDERS.........................................................14

PLAN OF DISTRIBUTION.........................................................20

DESCRIPTION OF SECURITIES....................................................22

LEGAL MATTERS................................................................24

EXPERTS......................................................................24

WHERE YOU CAN GET MORE INFORMATION...........................................24

INCORPORATION BY REFERENCE...................................................24

DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES.............................. 25








                               PROSPECTUS SUMMARY

You  should  read  the  following   summary  together  with  the  more  detailed
information  regarding us and the securities  being offered for sale by means of
this  prospectus  and our  financial  statements  and notes to those  statements
appearing  elsewhere  in this  prospectus.  The summary  highlights  information
contained elsewhere in this prospectus.  The terms "Bioenvision," "the company,"
"we,"  "our"  and  "us"  refer  to  Bioenvision,   Inc.  and  its   consolidated
subsidiaries unless the context suggests  otherwise.  The term "you" refers to a
prospective investor.

Bioenvision, Inc.

        We are an emerging  biopharmaceutical  company that develops and markets
drugs to treat  cancer.  Our two lead  drugs are  clofarabine  and  Modrenal(R),
although we have several other products and technologies under  development.  As
of October 11, 2004,  our internal  staff  consisted of nine  full-time and four
part-time employees based in New York, New York and Edinburgh, Scotland.

        Our primary business strategy relates to our two lead drugs, clofarabine
and Modrenal(R).  With clofarabine, our strategy is to complete drug development
in Europe  and  obtain  marketing  authorization  from the  European  regulatory
authorities to market and distribute  clofarabine in Europe for the treatment of
pediatric  and adult acute  leukemias  (ALL and AML).  We  anticipate  launching
clofarabine  in Europe in mid-2005,  subject to our obtaining  from the European
regulatory  authorities the first approval for clofarabine  which is expected to
be for pediatric  acute  leukemias.  We will continue  clinical  trials in other
indications  with the intention of aggressively  seeking label  extensions after
clofarabine's   first  approval,   including  our  Pivotal  Phase  II  trial  of
clofarabine  in adults with Acute  Myeloid  Leukemia  (AML) which  commenced  in
August 2004 and is  ongoing.  Following  this  strategy,  throughout  the world,
approximately  two-thirds of the cancer patients dosed with  clofarabine to date
fall outside of the pediatric acute leukemias.

        With Modrenal(R),  our strategy is to expand sales in the United Kingdom
and apply for mutual  recognition  to obtain the right to market and  distribute
Modrenal(R)  in the major  European  markets.  We  anticipate  receiving  mutual
recognition from major European  Community member states by Q3 of calendar 2005.
We intend to further  U.S.  development  of  Modrenal(R)  in prostate and breast
cancer indications, subject to the ongoing results of our clinical trials we are
currently conducting in the U.S. and Europe.

        Our secondary  business strategy is to continue to develop our portfolio
of ancillary products and technologies. We anticipate that revenues derived from
clofarabine  and  Modrenal(R)  and  milestone  payments and  royalties  from the
ancillary  products will permit us to further develop our portfolio of ancillary
products and technologies.

        Over the next 12  months,  we intend to  continue  our  internal  growth
strategy to provide the necessary regulatory,  sales and marketing  capabilities
which  will  be  required  to  pursue  the  expanded  development  programs  for
clofarabine and Modrenal(R) described above.

        Clofarabine is a small molecule,  purine nucleoside  analogue,  which we
believe is effective in the  treatment of leukemia,  based upon our own clinical
studies and studies  conducted by others on our behalf.  Clofarabine may also be
an effective  agent to treat  patients with solid tumors,  based on  preclinical
studies and Phase I clinical trials performed to date.

        In July 2004,  we filed for approval of  clofarabine  in Europe to treat
children with pediatric acute leukemia (ALL and AML). Further, we are conducting
a Pivotal Phase II clinical trial of clofarabine,  as first line therapy for the
treatment of adults with Acute Myeloid  Leukemia (AML).  Also in Europe,  at our
direction,  an Investigator Sponsored Trial of clofarabine as first-line therapy
for adults  with AML was  completed  ahead of schedule  and an interim  analysis
indicates a 64% complete response rate observed in this patient population.

        In the U.S., ILEX Oncology,  Inc., our sub-licensor of U.S. and Canadian
cancer marketing rights,  filed a New Drug Application ("NDA") in March 2004 for
approval of clofarabine to treat children with acute leukemias (ALL or AML). The
NDA was based upon results of two Pivotal Phase II clinical trials  completed by
ILEX prior to the NDA filing. In connection with the NDA, the United States Food
and Drug  Administration  (the "FDA") has set a  Prescription  Drug User Fee Act
("PDUFA") response date at December 30, 2004. A PDUFA date is the is the date by
which the FDA is expected to review and act upon an NDA submission.  Clofarabine
will be  reviewed  by the FDA  Oncologic  Drug  Advisory  Committee  ("ODAC") on
December 1, 2004.

        In  January,  2002,  the  European  orphan drug  application  for use of
clofarabine  to treat  acute  leukemia  in  adults  was  approved.  Orphan  Drug
Designation  provides the Company with ten years of market exclusivity in Europe
for clofarabine,  upon grant of marketing authorization.  The drug has also been
granted orphan drug status and "fast track"  treatment by the FDA.  Further,  in
July  2004,  the FDA  granted  six  months of  extended  market  exclusivity  to
clofarabine under the Best Pharmaceuticals for Children Act.

        In August 2003, we obtained the exclusive,  irrevocable  option to sell,
market and distribute  clofarabine in Japan and Southeast Asia from the inventor
of clofarabine.  These rights were not previously  granted by Southern  Research
Institute and fall outside the scope of the Company's then current licensing and
development  contracts with respect to  clofarabine.  We originally







obtained an exclusive license from Southern  Research  Institute to sell, market
and distribute  clofarabine throughout the world, except for Japan and Southeast
Asia, for all human applications,  pursuant to a co-development agreement, dated
August 31, 1998, between the Company and Southern Research  Institute.  On March
12,  2001,  we  granted  an  exclusive  option to sell,  market  and  distribute
clofarabine  in the U.S. and Canada to ILEX Oncology,  Inc. We converted  ILEX's
option to an exclusive sublicense on December 30, 2003.  Accordingly,  we do not
possess  the  rights to sell,  market  and  distribute  clofarabine  for  cancer
indications in the U.S.

        Modrenal(R)  is a hormonal  agent with a novel mode of action that makes
it an effective  agent in patients with advanced breast cancer who have acquired
resistance to other hormonal agents. We launched  Modrenal(R) in May 2003 in the
United Kingdom,  where we have received  regulatory  approval for its use in the
treatment of  post-menopausal  breast cancer. In Q2 2005, we intend to apply for
mutual  recognition in another four large  European  territories in an effort to
gain approval for  Modrenal(R) in each such territory.  We anticipate  receiving
approval in each such  territory  during  calendar  2005,  but such  approval is
subject to the appropriate regulatory decisions.

        In the U.S., we filed an IND to conduct Modrenal(R)  clinical trials for
prostate  cancer in  February  2004 and  commenced  enrolling  patients  in this
clinical trial in July 2004.  Further, we intend to seek regulatory approval for
Modrenal(R) in the United States as salvage therapy for hormone-sensitive breast
cancer upon completion of additional clinical studies.

        We originally obtained an exclusive license from Stegram Pharmaceuticals
Ltd. to sell, market and distribute Modrenal(R) throughout the world, except for
South  Africa,  for all human and  animal  health  applications,  pursuant  to a
co-development agreement dated July 15, 1998.

Corporate Background

        We were  incorporated  as Express  Finance,  Inc.  under the laws of the
State of Delaware on August 16, 1996, and changed our name to Ascot Group,  Inc.
in August 1998 and further to Bioenvision,  Inc. in December 1998. Our principal
executive offices are located at 345 Park Avenue, 41st Floor, New York, New York
10154.  Our  telephone  number  is (212)  750-6700  and our fax  number is (212)
750-6777.  Our  website is  www.bioenvision.com.  Information  contained  on our
website does not constitute, and shall not be deemed to constitute, part of this
prospectus.






                                      -2-







                                  The Offering

Shares of common stock offered by the
selling stockholders........................ 30,164,746

Shares of common stock outstanding as of
November 9, 2004............................ 28,882,319

Shares to be outstanding following
offering (assuming conversion of all
preferred shares into common shares and
the exercise of options and warrants,
and assuming no sales of any securities
pursuant to this offering).................. 48,264,038

Use of proceeds............................. We will not receive any proceeds
                                             from the issuance or sale of the
                                             shares included in this offering.
                                             We may receive consideration upon
                                             the exercise of options and we will
                                             receive consideration upon the
                                             conversion of warrants which we
                                             intend to use for general corporate
                                             purposes.

Risk Factors................................ An investment in our common stock
                                             is subject to significant risks.
                                             You should carefully consider the
                                             information set forth in the "Risk
                                             Factors" section of this prospectus
                                             as well as other information set
                                             forth in this prospectus, including
                                             our financial statements and
                                             related notes.

Plan of Distribution........................ The shares of common stock offered
                                             for resale may be sold by the
                                             selling stockholders pursuant to
                                             this prospectus in the manner
                                             described under "Plan of
                                             Distribution" on page 20.

Nasdaq symbol............................... BIVN










                                       -3-




                                  RISK FACTORS

        You should  carefully  consider the following risks before you decide to
buy our Common Stock. Our business, financial condition or operating results may
suffer if any of the events  described in the  following  risk factors  actually
occur.  All known  risks  are  presented  in this  prospectus.  These  risks may
adversely affect our business,  financial condition or operating results. If any
of the events we have  identified  occur,  the trading price of our Common Stock
could  decline,  and you may lose all or part of the  money  you paid to buy our
Common Stock.

The price of our  Common  Stock is likely to be  volatile  and  subject  to wide
fluctuations

        The market price of the securities of  biotechnology  companies has been
especially volatile.  Thus, the market price of our Common Stock is likely to be
subject to wide  fluctuations.  For the twelve month  period ended  November 10,
2004,  our  closing  stock  price has  ranged  from a high of $11.75 to a low of
$3.00.  If our revenues do not grow or grow more slowly than we anticipate,  or,
if  operating  or capital  expenditures  exceed our  expectations  and cannot be
adjusted  accordingly,  or if some other event adversely  affects us, the market
price of our  Common  Stock  could  decline.  In  addition,  if the  market  for
pharmaceutical  and  biotechnology   stocks  or  the  stock  market  in  general
experiences a loss in investor  confidence or otherwise  fails, the market price
of our Common Stock could fall for reasons unrelated to our business, results of
operations  and  financial  condition.  The market price of our stock also might
decline in reaction to events that affect other  companies in our industry  even
if these  events do not  directly  affect us. In the past,  companies  that have
experienced  volatility in the market price of their stock have been the subject
of  securities  class  action  litigation.  If we were to become the  subject of
securities class action  litigation,  it could result in substantial costs and a
diversion of management's attention and resources.

Certain events could result in a dilution of holders of our Common Stock

         As of  November  9,  2004,  we had  28,882,319  shares of Common  Stock
outstanding,   3,275,000   shares  of  Series  A  Convertible   Preferred  Stock
outstanding  which are currently  convertible  into  6,550,000  shares of Common
Stock and  common  stock  equivalents,  including  warrants  and stock  options,
convertible  or  exercisable  into  12,886,865  shares of our Common Stock.  The
exercise and conversion  prices of the common stock equivalents range from $0.74
to $8.25 per share. We have also reserved for issuance an aggregate of 3,000,000
shares of Common Stock for a stock option plan for our employees.  Historically,
from time to time,  we have awarded our Common Stock to officers of the Company,
in lieu of cash compensation,  although we do not expect to do so in the future.
As of November 9, 2004, (i) we have 37,750,699 shares of common stock registered
under the Securities Act, and (ii) the sale of shares of Common Stock underlying
4,500,000  options are  registered  under the  Securities  Act on Form S-8.  The
future resale of these shares and shares  underlying  stock options and warrants
will result in a dilution to your  percentage  ownership of our Common Stock and
could adversely affect the market price of our Common Stock.

        The  terms  of  our  Series  A  Convertible   Preferred   Stock  include
antidilution  protection  upon the occurrence of sales of our Common Stock below
certain   prices,   stock  splits,   redemptions,   mergers  and  other  similar
transactions.  If one or more of these events occurs the number of shares of our
Common Stock that may be acquired upon conversion or exercise would increase. If
converted  or  exercised,  these  securities  will  result in a dilution to your
percentage  ownership of our Common  Stock.  The resale of many of the shares of
Common Stock which underlie these options and warrants are registered under this
prospectus and the sale of such shares may adversely  affect the market price of
our Common Stock.

The provisions of our charter and Delaware law may inhibit potential acquisition
bids that  stockholders  may believe are desirable,  and the market price of our
Common Stock may be lower as a result

Section 203 of the Delaware corporate statute

        We are  subject to the  anti-takeover  provisions  of Section 203 of the
Delaware corporate statute, which regulates corporate acquisitions.  Section 203
may  affect  the  ability of an  "interested  stockholder"  to engage in certain
business  combinations,  including  mergers,  consolidation  or  acquisitions of
additional  shares,  for a period  of three  years  following  the time that the
stockholder becomes an "interested stockholder".  An "interested stockholder" is
defined to include  persons  owning  directly or  indirectly  15% or more of the
outstanding  voting stock of a corporation.  These  provisions  could discourage
potential  acquisition  proposals and could delay or prevent a change in control
transaction.  They could also have the effect of discouraging others from making
tender offers for our Common Stock.  As a result,  these  provisions may prevent
our stock price from increasing  substantially  in response to actual or rumored
takeover attempts. These provisions may also prevent changes in our management.

Issuance of Preferred Stock Without Common Stockholder Approval.

 Our charter  authorizes  our board of director to increase the number of shares
of  preferred  stock we may  issue  without  approval  of  common  stockholders.
Preferred  stock may be issued in one or more series,  the terms of which may be
determined  without  further




                                      -4-




action by common stockholders.  These terms may include preferences,  conversion
or other  rights,  voting  powers,  restrictions,  limitations  as to dividends,
qualifications  or  terms or  conditions  of  redemption.  The  issuance  of any
preferred stock could  materially  adversely affect the rights of holders of our
common stock, and therefore could reduce its value. In addition, specific rights
granted to future  holders of  preferred  stock  could be used to  restrict  our
ability to merge with, or sell assets to, a third party.  The power of the board
of  directors  to issue  preferred  stock could make it more  difficult,  delay,
discourage,  prevent  or make it more  costly to  acquire  or effect a change in
control, thereby preserving the current stockholders' control.

We have a limited  operating  history,  which makes it difficult to evaluate our
business and to predict our future operating results

        Since our inception,  August of 1996, we have been primarily  engaged in
organizational  activities,  including  developing a strategic  operating  plan,
entering into various  collaborative  agreements for the development of products
and technologies,  hiring personnel and developing and testing our products.  We
have not  generated  any  material  revenues  to date.  Accordingly,  we have no
relevant  operating  history upon which an  evaluation  of our  performance  and
prospects can be made.

We have incurred net losses since commencing business and expect future losses

         To date, we have incurred significant net losses,  including net losses
of  approximately  $11,574,000  for the fiscal year ended June 30, 2004. At June
30,  2004,  we had an  accumulated  deficit  of  approximately  $41,082,000.  We
anticipate that we may continue to incur  significant  operating  losses for the
foreseeable   future.  We  may  never  generate  material  revenues  or  achieve
profitability  and,  if we do  achieve  profitability,  we may  not be  able  to
maintain profitability.

Clinical  trials for our products will be expensive  and may be time  consuming,
and their outcome is uncertain,  but we must incur substantial expenses that may
not result in any viable products

        Before  obtaining  regulatory  approval  for  the  commercial  sale of a
product,  we must demonstrate through  pre-clinical  testing and clinical trials
that a product  candidate is safe and  effective  for use in humans.  Conducting
clinical  trials is a lengthy,  time-consuming  and expensive  process.  We will
incur  substantial  expense  for,  and  devote a  significant  amount of time to
pre-clinical  testing  and  clinical  trials.  Even with  Modrenal(R),  which is
approved  and  marketed  by us in  the  U.K.  for  the  treatment  of  advanced,
post-menopausal  breast  cancer,  we are conducting a Phase II Clinical Trial in
the U.S. in prostate  cancer and a Phase II Clinical  Trial in the U.K.  for the
treatment of  pre-menopausal  breast  cancer,  each of which is a new  potential
indication for this approved drug.

        Historically,  the results from pre-clinical  testing and early clinical
trials have often not been  predictive  of results  obtained  in later  clinical
trials.  A number of new drugs have shown promising  results in clinical trials,
but  subsequently  failed to establish  sufficient  safety and efficacy  data to
obtain  necessary  regulatory  approvals.  Data obtained from  pre-clinical  and
clinical activities are susceptible to varying interpretations, which may delay,
limit or prevent  regulatory  approval.  Regulatory  delays or rejections may be
encountered as a result of many factors,  including changes in regulatory policy
during the period of product  development.  Regulatory  authorities  may require
additional   clinical  trials,   which  could  result  in  increased  costs  and
significant  development delays.  Clofarabine currently is at a pivotal stage of
its development,  but many of our other products and technologies are at various
less mature stages of  development  including  l-gossypol for which we have just
commenced  a Phase I  clinical  trial in the  U.K.  and  gene  therapy  which is
currently in pre-clinical and phase I clinical testing.

        Completion of clinical  trials for any product may take several years or
more. The length of time generally varies  substantially  according to the type,
complexity,  novelty and intended use of the product candidate. Our commencement
and rate of  completion  of  clinical  trials may be  delayed  by many  factors,
including:

        o      inability  of vendors to  manufacture  sufficient  quantities  of
               materials for use in clinical trials;

        o      slower than expected rate of patient  recruitment  or variability
               in the number and types of patients in a study;

        o      inability to adequately follow patients after treatment;

        o      unforeseen safety issues or side effects;

        o      lack of efficacy during the clinical trials; or

        o      government or regulatory delays.

Our intangible assets constitute a significant  portion of our assets and relate
to ancillary products which may not be successfully commercialized





                                      -5-




        Our  ancillary  products  include  OLIGON and  Methylene  Blue which are
anti-microbial  agents that we acquired in February  2002.  As of June 30, 2004,
our intangible  assets  associated with these products amounted to approximately
$14.6  million  and  constituted  approximately  33% of  our  total  assets  and
approximately 53% of our stockholders'  equity. We amortize  approximately  $1.3
million of this amount each year for the estimated useful life of these products
of approximately 13 years.

        We do not  currently  devote any  significant  time or  resources to the
research and  development  of OLIGON and Methylene Blue and only intend to do so
if and to the extent we successfully  commercialize our lead drugs,  clofarabine
and  Modrenal(R),  over  the  next  two  years.  If at any  time  in the  future
management   determines  that  the  carrying  amount  of  these  assets  is  not
recoverable, we would need to write down the value of these assets. Based on the
estimated  useful  life of these  assets of  approximately  13 years and  market
considerations,  no assurance  can be given that there will not be an impairment
of these assets in the future.  Any impairment of these assets could result in a
material impact on our future results of operations.

If our development  agreement with ILEX does not proceed as planned we may incur
delay in the commercialization of clofarabine,  which would delay our ability to
generate sales and cash flow from the sale of clofarabine

        ILEX, and any third party to which ILEX may grant a sublicense or in any
way transfer its obligations, has primary responsibility for conducting clinical
trials and  administering  regulatory  compliance  and  approval  matters in the
United States and Canada pursuant to the terms of our  co-development  agreement
with ILEX.  While there are target dates for completion,  that agreement  allows
ILEX time to continue  working  beyond those dates under certain  circumstances.
For example, under the co-development  agreement,  ILEX was required to complete
Pivotal Phase II Trials not later than December 31, 2002,  but ILEX failed to do
so. In this situation the  co-development  agreement provides that the milestone
shall be adjusted  such that ILEX  receives  more time to  complete  the pivotal
trials if the trials  are  ongoing  at  December  31,  2002 and  progressing  to
completion within a reasonable time thereafter. Further, ILEX was required under
the co-development  agreement to have filed a New Drug Application by August 31,
2003,  subject to extension if ILEX continues to use its  reasonable  efforts to
promptly  complete the filing after August 31, 2003.  ILEX  continued to use its
reasonable  efforts to complete  the filing after August 31, 2003 and in October
2003, Ilex filed the first part of a "rolling NDA" with the FDA.

        If  ILEX  fails  to  meet  its  obligations  under  the   co-development
agreement,   we  could  lose  valuable  time  in  developing   clofarabine   for
commercialization  both in the U.S. and in Europe.  We can not provide assurance
that  ILEX  will not  fail to meet  its  obligations  under  the  co-development
agreement.  Development of compounds to the stage of approval  includes inherent
risk at each stage of development  that FDA, in its  discretion,  will mandate a
requirement not foreseeable by us or by ILEX. There would also be testing delays
if, for example, our sources of drug supply could not produce enough clofarabine
to support the then ongoing  clinical  trials being  conducted.  If this were to
occur,  it could  have a  material  adverse  effect on our  ability  to  develop
clofarabine,  obtain necessary regulatory approvals, and generate sales and cash
flow from the sale of clofarabine.

        If delays in completion constitute a breach by ILEX or there are certain
other breaches of the co-development agreement by ILEX, then, at our discretion,
the primary  responsibility  for completion  would revert to us, but there is no
assurance that we would have the financial, managerial or technical resources to
complete such tasks in timely fashion or at all.

We have limited experience in developing products and may be unsuccessful in our
efforts to develop products

        To  achieve  profitable  operations,  we,  alone  or with  others,  must
successfully  develop,  clinically  test,  market and sell our products.  We are
developing clofarabine with ILEX Oncology, our U.S.  co-development partner, but
on February  26,  2004,  Genzyme  announced a merger  pursuant to which  Genzyme
intends  to  acquire  ILEX  in a  merger  transaction.  If this  transaction  is
consummated,  no  assurance  can be given that the  operational  and  managerial
relations  with  Genzyme  will  proceed  favorably  or  that  the  timeline  for
development  of  clofarabine  will  not be  elongated.  If the  U.S.  regulatory
timeline is elongated,  this could  materially and adversely affect the European
regulatory timeline for the approval of clofarabine.

        With respect to our co-lead  drug,  Modrenal(R),  we  currently  have an
Investigational  New  Drug  Application  filed  with FDA to  conduct  a Phase II
Clinical  Trial in the U.S. to  determine  efficacy of  Modrenal(R)  in prostate
cancer  patients.  This Phase II Clinical  Trial is being  conducted at the Mass
General  Hospital  in Boston,  MA. To our  knowledge,  Modrenal(R)  has not been
tested  in this  indication  in the  past and  there  can be no  assurance  that
Modrenal(R)  will be an  effective  therapy in  prostate  cancer.  Further,  our
long-term drug development objectives for Modrenal(R) include attempting to test
the drug and get approval in the U.S. for treatment of advanced  post-menopausal
breast cancer patients. These trials will take significant time and resource and
no  assurance  can be given that  developing  the drug in this  indication  will
result in a U.S.  approval for  Modrenal(R) in advanced  post-menopausal  breast
cancer patients.

        Generally,  most  products  resulting  from  our  or  our  collaborative
partners' product  development efforts are not expected to be available for sale
for at least  several  years,  if at all.  Potential  products that appear to be
promising at early stages of  development  may not reach the market for a number
of reasons, including:



                                      -6-




        o      discovery during pre-clinical testing or clinical trials that the
               products are ineffective or cause harmful side effects;

        o      failure to receive necessary regulatory approvals;

        o      inability  to  manufacture  on a large or  economically  feasible
               scale;

        o      failure to achieve market acceptance; or

        o      preclusion from  commercialization by proprietary rights of third
               parties.

        Most of the existing and future products and  technologies  developed by
us will require extensive additional development, including pre-clinical testing
and   clinical   trials,   as   well   as   regulatory   approvals,   prior   to
commercialization. Our product development efforts may not be successful. We may
fail to receive required  regulatory  approvals from U.S. or foreign authorities
for any  indication.  Any products,  if introduced,  may not be capable of being
produced in  commercial  quantities at  reasonable  costs or being  successfully
marketed.  The failure of our research and  development  activities to result in
any  commercially  viable products or technologies  would  materially  adversely
affect our future prospects.

Our  industry is subject to  extensive  government  regulation  and our products
require other regulatory  approvals which makes it more expensive to operate our
business

        Regulation  in  General.  Virtually  all  aspects  of our  business  are
regulated by federal and state statutes and governmental  agencies in the United
States and other  countries.  Failure to comply  with  applicable  statutes  and
government  regulations  could have a material  adverse effect on our ability to
develop and sell products  which would have a negative  impact on our cash flow.
The development, testing, manufacturing,  processing, quality, safety, efficacy,
packaging, labeling,  record-keeping,  distribution,  storage and advertising of
pharmaceutical  products,  and  disposal of waste  products  arising  from these
activities,  are subject to  regulation by one or more federal  agencies.  These
activities are also regulated by similar state and local agencies and equivalent
foreign  authorities.  In our  material  contracts  with vendors  providing  any
portion of these types of services,  we seek  assurances that our vendors comply
and  will  continue  to  maintain  compliance  with  all  applicable  rules  and
regulations.  This is the case, for example,  with respect to our contracts with
Ferro  Pfanstiehl and Penn  Pharmaceuticals.  No assurance can be given that our
most  significant   vendors  will  continue  to  comply  with  these  rules  and
regulations.

        FDA Regulation.  All  pharmaceutical  manufacturers in the United States
are subject to  regulation  by the FDA under the  authority of the Federal Food,
Drug,  and Cosmetic  Act.  Under the Act, the federal  government  has extensive
administrative   and  judicial   enforcement   powers  over  the  activities  of
pharmaceutical  manufacturers to ensure  compliance with FDA regulations.  Those
powers include, but are not limited to the authority to:

        o      initiate  court  action  to  seize  unapproved  or  non-complying
               products;

        o      enjoin non-complying activities;

        o      halt  manufacturing  operations  that are not in compliance  with
               current good manufacturing practices prescribed by the FDA;

        o      recall products which present a health risk; and

        o      seek civil monetary and criminal penalties.

        Other  enforcement   activities   include  refusal  to  approve  product
applications  or  the  withdrawal  of  previously  approved  applications.   Any
enforcement  activities,  including the  restriction  or prohibition on sales of
products marketed by us or the halting of manufacturing  operations of us or our
collaborators,  would have a material  adverse  effect on our ability to develop
and sell  products  which  would  have a negative  impact on our cash  flow.  In
addition, product recalls may be issued at our discretion or by the FDA or other
domestic  and  foreign  government  agencies  having  regulatory  authority  for
pharmaceutical product sales. Recalls may occur due to disputed labeling claims,
manufacturing   issues,   quality   defects   or  other   reasons.   Recalls  of
pharmaceutical  products  marketed  by us may occur in the  future.  Any product
recall could have a material adverse effect on our revenue and cash flow.

        FDA Approval Process.  We have a variety of products under  development,
including  line  extensions  of existing  products,  reformulations  of existing
products  and  new  products.  All  "new  drugs"  must  be  the  subject  of  an
FDA-approved  new drug  application  before  they may be  marketed in the United
States. All generic equivalents to previously approved drugs or new dosage forms
of existing drugs must be the subject of an  FDA-approved  abbreviated  new drug
application before they may by marketed in the United States. In both cases, the
FDA has the authority to determine what testing procedures are appropriate for a
particular  product  and, in some  instances,  has not  published  or  otherwise
identified  guidelines  as to  the  appropriate  procedures.  The  FDA  has  the
authority to



                                      -7-




withdraw existing new drug application and abbreviated application approvals and
to review the  regulatory  status of  products  marketed  under the  enforcement
policy.  The FDA may require an approved  new drug  application  or  abbreviated
application for any drug product  marketed under the  enforcement  policy if new
information  reveals  questions  about the drug's safety or  effectiveness.  All
drugs  must be  manufactured  in  conformity  with  current  good  manufacturing
practices and drugs subject to an approved new drug  application  or abbreviated
application  must be  manufactured,  processed,  packaged,  held and  labeled in
accordance with information contained in the new drug application or abbreviated
application.

        The required  product testing and approval  process can take a number of
years and require  the  expenditure  of  substantial  resources.  Testing of any
product  under  development  may not  result in a  commercially-viable  product.
Further,  we may decide to modify a product in testing,  which could  materially
extend the test  period and  increase  the  development  costs of the product in
question.  Even after time and expenses,  regulatory approval by the FDA may not
be obtained for any products we develop.  In addition,  delays or rejections may
be  encountered  based upon  changes in FDA policy  during the period of product
development and FDA review.  Any regulatory  approval may impose  limitations in
the indicated use for the product.  Even if regulatory  approval is obtained,  a
marketed product, its manufacturer and its manufacturing  facilities are subject
to continual review and periodic inspections. Subsequent discovery of previously
unknown  problems  with a  product,  manufacturer  or  facility  may  result  in
restrictions on the product or manufacturer, including withdrawal of the product
from the market.

        Foreign  Regulatory  Approval.  Even if required  FDA  approval has been
obtained  with respect to a product,  foreign  regulatory  approval of a product
must also be obtained  prior to marketing the product  internationally.  Foreign
approval  procedures  vary from  country to country  and the time  required  for
approval  may  delay or  prevent  marketing.  In  certain  instances,  we or our
collaborative partners may seek approval to market and sell some of our products
outside of the United States before  submitting an  application  for approval to
the FDA.  The  clinical  testing  requirements  and the time  required to obtain
foreign  regulatory  approvals  may differ from that  required for FDA approval.
Although there is now a centralized  European  Union approval  mechanism for new
pharmaceutical  products in place,  each European Union country may  nonetheless
impose its own procedures and requirements, many of which are time consuming and
expensive,  and some European Union countries  require price approval as part of
the  regulatory  process.  Thus,  there can be  substantial  delays in obtaining
required approval from both the FDA and foreign regulatory authorities after the
relevant applications are filed.

        Changes in Requirements.  The regulatory  requirements applicable to any
product may be modified in the future.  We cannot  determine what effect changes
in regulations or statutes or legal  interpretations may have on our business in
the future. Changes could require changes to manufacturing methods,  expanded or
different  labeling,  the  recall,  replacement  or  discontinuation  of certain
products, additional record keeping and expanded documentation of the properties
of  certain  products  and  scientific   substantiation.   Any  changes  or  new
legislation  could have a material  adverse effect on our ability to develop and
sell products and, therefore, generate revenue and cash flow.

        The products under  development by us may not meet all of the applicable
regulatory  requirements needed to receive regulatory  marketing approval.  Even
after we expend substantial resources on research,  clinical development and the
preparation  and  processing of regulatory  applications,  we may not be able to
obtain  regulatory  approval  for  any of  our  products.  Moreover,  regulatory
approval for marketing a proposed pharmaceutical product in any jurisdiction may
not result in similar approval in other jurisdictions. Our failure to obtain and
maintain  regulatory  approvals  for  products  under  development  would have a
material  adverse  effect on our  ability  to  develop  and sell  products  and,
therefore, generate revenue and cash flow.

We may not be  successful  in  receiving  orphan  drug status for certain of our
products or, if that status is obtained,  fully  enjoying the benefits of orphan
drug status

        Under the Orphan Drug Act, the FDA may grant orphan drug  designation to
drugs intended to treat a rare disease or condition. A disease or condition that
affects  populations of fewer than 200,000 people in the United States generally
constitutes a rare disease or  condition.  We may not be successful in receiving
orphan drug status for certain of our products.  Orphan drug designation must be
requested before submitting a new drug application.  After the FDA grants orphan
drug  designation,  the  generic  identity  of the  therapeutic  agent  and  its
potential  orphan use are publicized by the FDA. Under current law,  orphan drug
status is conferred upon the first company to receive FDA approval to market the
designated  drug for the designated  indication.  Orphan drug status also grants
marketing exclusivity in the United States for a period of seven years following
approval  of the new drug  application,  subject  to  limitations.  Orphan  drug
designation  does not provide any  advantage in, or shorten the duration of, the
FDA regulatory  approval  process.  Although  obtaining FDA approval to market a
product with orphan drug status can be advantageous,  the scope of protection or
the level of marketing  exclusivity  that is  currently  afforded by orphan drug
status and marketing approval may not remain in effect in the future.

        Our business  strategy  involves  obtaining  orphan drug designation for
certain of the oncology products we have under development. Although clofarabine
has  received  orphan  drug  designation  with the FDA and EMEA,  we do not know
whether  any of our other  products  will  receive an orphan  drug  designation.
Orphan drug designation does not prevent other  manufacturers from




                                      -8-




attempting  to  develop  similar  drugs for the  designated  indication  or from
obtaining  the  approval of a new drug  application  for their drug prior to the
approval of our new drug application.  If another sponsor's new drug application
for a competing drug in the same indication is approved  first,  that sponsor is
entitled to exclusive  marketing rights if that sponsor has received orphan drug
designation  for its drug. In that case, the FDA would refrain from approving an
application  by us to market our competing  product for seven years,  subject to
limitations.  Competing  products may receive orphan drug  designations  and FDA
marketing approval before the products under development by us.

        New drug application approval for a drug with an orphan drug designation
does  not  prevent  the  FDA  from  approving  the  same  drug  for a  different
indication,  or a molecular  variation of the same drug for the same indication.
Because doctors are not restricted by the FDA from  prescribing an approved drug
for uses not approved by the FDA, it is also  possible  that  another  company's
drug could be prescribed for indications for which products developed by us have
received orphan drug designation and new drug application  approval and the same
is true with the EMEA in Europe.  Prescribing  of approved  drugs for unapproved
uses,  commonly  referred to as "off label" sales,  could  adversely  affect the
marketing  potential of products that have  received an orphan drug  designation
and new drug application approval. In addition, new drug application approval of
a  drug  with  an  orphan  drug  designation  does  not  provide  any  marketing
exclusivity in foreign markets.

        The  possible  amendment  of the Orphan  Drug Act by the  United  States
Congress has been the subject of frequent  discussion.  Although no  significant
changes to the Orphan Drug Act have been made for a number of years,  members of
Congress  have from  time to time  proposed  legislation  that  would  limit the
application of the Orphan Drug Act. The precise scope of protection  that may be
afforded by orphan drug  designation  and  marketing  approval may be subject to
change in the future.

The use of our products may be limited or eliminated by professional  guidelines
which would decrease our sales of these products and, therefore, our revenue and
cash flows.

        In addition to government agencies,  private health/science  foundations
and  organizations  involved in various diseases may also publish  guidelines or
recommendations  to  the  healthcare  and  patient  communities.  These  private
organizations may make recommendations that affect the usage of therapies, drugs
or procedures,  including  products developed by us. These  recommendations  may
relate to matters  such as usage,  dosage,  route of  administration  and use of
concomitant  therapies.  Recommendations  or  guidelines  that are  followed  by
patients  and  healthcare  providers  and that result in,  among  other  things,
decreased use or elimination  of products  developed by us could have a material
adverse  effect on our revenue and cash flows.  For example,  if  clofarabine is
definitively  determined in clinical trials to be an active agent to treat solid
tumor cancer patients, but the required dose is high, private healthcare/science
foundations  could recommend  various other regimens of treatment which may from
time to time show activity at lower doses.

Generic  products  which  third  parties  may  develop  may render our  products
noncompetitive or obsolete

         An increase in competition from generic  pharmaceutical  products could
have a material adverse effect on our ability to generate revenue and cash flow.
For example,  many of the indications in which clofarabine and Modrenal(R),  our
co-lead drugs, have demonstrated activity are areas of unmet clinical need, such
as clofarabine's  application to pediatric acute leukemias in which,  initially,
the drug will be used as a salvage  therapy,  after other  regimens of treatment
have failed. Our lead  investigators,  who have assisted with the development of
Modrenal(R),  envision,  initially,  that Modrenal(R) would be used as second or
third line therapy,  only after  patients with advanced  post-menopausal  breast
cancer receive  regimens of tamoxifen  and/or  aromatase  inhibitors (or similar
drug)  treatments.  If generic drug  companies  develop a compound which is more
effective  than  either  clofarabine  or  Modrenal(R)  in  these  areas of unmet
clinical  need, or equally as effective but at lower doses,  it could  adversely
affect our market and/or render our drugs obsolete.

 Because many of our competitors  have  substantially  greater  capabilities and
resources,  they may be able to  develop  products  before  us or  develop  more
effective products or market them more effectively which would limit our ability
to generate revenue and cash flow

         Competition  in our industry is intense.  Potential  competitors in the
United States and Europe are numerous and include  pharmaceutical,  chemical and
biotechnology  companies,  most of  which  have  substantially  greater  capital
resources, marketing experience,  research and development staffs and facilities
than us.  Potential  competitors  for  certain  indications  of our  lead  drugs
include,  with respect to clofarabine,  Schering AG, which markets  fludarabine,
and certain generic drug companies in Europe which could market fludarabine upon
expiry of the patent  protections held by Schering.  Potential  competitors with
respect to Modrenal(R) include Astra-zeneca and Novartis, which market tamoxifen
and other aromatase  inhibitors,  which could be used by clinicians as first and
second  line   therapies   in  patients   with  hormone   sensitive,   advanced,
post-menopausal  breast cancer prior to a Modrenal(R)  regimen of treatment.  No
assurance can be given that the ongoing  business  activities of our competitors
will  not  have  a  material  adverse  effect  on  our  business  prospects  and
projections going forward.




                                      -9-




        Although we seek to limit potential sources of competition by developing
products that are eligible for orphan drug  designation and new drug application
approval or other  forms of  protection,  our  competitors  may develop  similar
technologies and products more rapidly than us or market them more  effectively.
Competing technologies and products may be more effective than any of those that
are being or will be  developed  by us. The generic  drug  industry is intensely
competitive  and  includes  large  brand  name and  multi-source  pharmaceutical
companies.  Because  generic  drugs do not have patent  protection  or any other
market  exclusivity,  our competitors may introduce  competing generic products,
which may be sold at lower prices or with more aggressive marketing. Conversely,
as we  introduce  branded  drugs  into  our  product  portfolio,  we  will  face
competition  from  manufacturers  of  generic  drugs  which  may  claim to offer
equivalent  therapeutic  benefits  at a  lower  price.  The  aggressive  pricing
activities of our generic  competitors  could have a material  adverse effect on
our operations, revenue and cash flow.

If we fail to keep up with rapid  technological  change and evolving  therapies,
our technologies and products could become less competitive or obsolete

        The  pharmaceutical  industry is  characterized by rapid and significant
technological change. We expect that pharmaceutical  technology will continue to
develop  rapidly,  and our future  success will depend on our ability to develop
and maintain a competitive  position.  Technological  development  by others may
result in products developed by us, branded or generic, becoming obsolete before
they are marketed or before we recover a significant  portion of the development
and  commercialization   expenses  incurred  with  respect  to  these  products.
Alternative  therapies or new medical  treatments could alter existing treatment
regimes,  and thereby reduce the need for one or more of the products  developed
by us,  which  would  adversely  affect  our  revenue  and cash  flow.  See also
"--Generic  products  which third  parties  may develop may render our  products
noncompetitive or obsolete" above.

We depend on others for clinical  testing of our products  which could delay our
ability to develop products

        We do not currently have any internal product testing capabilities.  Our
inability  to retain  third  parties  for the  clinical  testing of  products on
acceptable  terms would adversely  affect our ability to develop  products.  Any
failures by third parties to adequately perform their responsibilities may delay
the  submission  of  products  for  regulatory  approval,  impair our ability to
deliver products on a timely basis or otherwise impair our competitive position.
Our  dependence on third parties for the  development  of products may adversely
affect our  potential  profit  margins  and our  ability to develop  and deliver
products on a timely basis.

We depend on others to manufacture our products and have not  manufactured  them
in significant quantities

        We have never  manufactured any products in commercial  quantities,  and
the  products  being  developed  by  us  may  not  be  suitable  for  commercial
manufacturing in a cost-effective manner. Manufacturers of products developed by
us will be subject to current good manufacturing practices prescribed by the FDA
or other rules and regulations prescribed by foreign regulatory authorities.  We
may not be able to enter into or maintain  relationships  either domestically or
abroad  with  manufacturers  whose  facilities  and  procedures  comply  or will
continue to comply with  current  good  manufacturing  practices  or  applicable
foreign  requirements.  Failure by a manufacturer of our products to comply with
current good manufacturing  practices or applicable  foreign  requirements could
result in significant  time delays or our inability to commercialize or continue
to market a product  and could  have a material  adverse  effect on our sales of
products and, therefore,  our cash flow. In the United States, failure to comply
with current good manufacturing practices or other applicable legal requirements
can lead to federal seizure of violative products, injunctive actions brought by
the federal  government,  and potential criminal and civil liability on the part
of a company and our officers and employees.

We have limited  sales and  marketing  capability,  and may not be successful in
selling or marketing our products

        The creation of infrastructure  to commercialize  oncology products is a
difficult, expensive and time-consuming process. We may not be able to establish
direct or indirect  sales and  distribution  capabilities  or be  successful  in
gaining market  acceptance for proprietary  products or for other  products.  We
currently  have very  limited  sales and  marketing  capabilities.  We currently
employ one full-time  sales employee and one full-time  marketing  employee.  To
market any products  directly,  we will need to develop a more fulsome marketing
and sales force with technical expertise and distribution capability or contract
with other pharmaceutical and/or health care companies with distribution systems
and direct sales forces.  To the extent that we enter into co-promotion or other
licensing  arrangements,  any revenues to be received by us will be dependent on
the  efforts  of  third  parties.  The  efforts  of  third  parties  may  not be
successful.  Our failure to establish marketing and distribution capabilities or
to enter into marketing and distribution  arrangements  with third parties could
have a material adverse effect on our revenue and cash flows.

If we lose key management our business will suffer

        We are highly  dependent on our Chief  Executive  Officer to develop our
lead drug. Dr. Wood has an employment agreement with the Company, dated December
31,  2002,  for an initial term of one year which  automatically  extends for an
additional one year periods until either party gives the other written notice of
termination  at least 90 days prior to the end of the current term.  Dr. Wood



                                      -10-




is not near  retirement age and he does not, to our  knowledge,  plan on leaving
the Company in the near  future.  Dr. Wood is one of the founders of the company
and he is intimately familiar with the science that underlies our lead drugs and
ancillary  technologies.  He  also  maintains  a  position  on  the  clofarabine
management team that is responsible for all drug development activities relating
to that lead drug, and has been  instrumental in the development and maintenance
of our key relationships within the scientific research and medical communities,
and those with our vendors, inventors, co-development partners and licensors. If
Dr. Wood was no longer  employed by the company,  the  development  of our drugs
would be significantly delayed and otherwise would be adversely impacted, and we
may be unable to maintain and develop these important relationships.

Need for additional personnel

        The Company will be required to hire additional qualified scientific and
technical personnel, as well as personnel with expertise in clinical testing and
government regulation to expand our research and development programs and pursue
our product  development and marketing plans.  There is intense  competition for
qualified personnel in the areas of the Company's  activities,  and there can be
no assurance  that the Company will be able to attract and retain the  qualified
personnel  necessary  for the  development  of its  business.  The Company faces
competition  for  qualified   individuals  from  numerous   pharmaceutical   and
biotechnology companies,  universities and research institutions. The failure to
attract and retain key scientific,  marketing and technical personnel would have
a material  adverse effect on the development of the Company's  business and our
ability to develop,  market and sell our  products.  See also "- We have limited
sales  and  marketing  capability,  and  may not be  successful  in  selling  or
marketing our products" above.

Our management and internal  systems might be inadequate to handle our potential
growth

        Our success  will depend in  significant  part on the  expansion  of our
operations  and the  effective  management  of growth.  This growth has and will
continue to place a significant strain on our management and information systems
and resources and  operational  and financial  systems and resources.  To manage
future  growth,  our  management  must continue to improve our  operational  and
financial  systems and expand,  train,  retain and manage our employee base. Our
management  may not be able to manage our growth  effectively.  If our  systems,
procedures,  controls,  and resources are inadequate to support our  operations,
our expansion  would be halted or delayed and we could lose our  opportunity  to
gain  significant  market share or the timing with which we would otherwise gain
significant  market share.  Any inability to manage growth  effectively may harm
our  ability  to  institute  our  business  plan.  The  strain  on our  systems,
procedures,  controls and  resources is further  heightened by the fact that our
executive office and operational  development facilities are located in separate
time zones (New York, New York and Edinburgh, Scotland, respectively).


We  depend  on  patent  and  proprietary  rights  to  develop  and  protect  our
technologies and products, which rights may not offer us sufficient protection

        The pharmaceutical  industry places considerable importance on obtaining
patent and trade secret protection for new technologies, products and processes.
Our success  will depend on our  ability to obtain and  enforce  protection  for
products that we develop  under United States and foreign  patent laws and other
intellectual  property laws,  preserve the  confidentiality of our trade secrets
and operate without infringing the proprietary rights of third parties.  Through
our  current  license  agreements,  we have  acquired  the right to utilize  the
technology  covered  by  issued  patents  and  patent  applications,  as well as
additional  intellectual  property  and  know-how  that could be the  subject of
further patent  applications in the future.  Several of the original  patents to
Modrenal(R)  have expired in the United States and foreign  countries.  Thus, we
and our licensors are pursuing patent applications to specific uses, combination
therapy and dosages or  formulations of  Modrenal(R).  We cannot  guarantee that
such  applications  will result in issued patents or that such patents if issued
will provide adequate protection against competitors.  Patents may not be issued
from these  applications and issued patents may not give us adequate  protection
or a  competitive  advantage.  Issued  patents may be  challenged,  invalidated,
infringed or circumvented,  and any rights granted thereunder may not provide us
with competitive advantages. Parties not affiliated with us have obtained or may
obtain  United States or foreign  patents or possess or may possess  proprietary
rights  relating to products  being  developed or to be developed by us. Patents
now in  existence  or  hereafter  issued  to others  may  adversely  affect  the
development or commercialization of products developed or to be developed by us.
Our planned  activities  may infringe  patents  owned by others.  Our patents to
clofarabine are licensed from Southern Research Institute. The current projected
expiration date of the license is March 2021. These patents cover pharmaceutical
compositions  and methods of using  clofarabine.  We cannot guarantee that these
patents  would  survive an attack on their  validity or that they will provide a
competitive  advantage over our competitors.  Moreover, we cannot guarantee that
Southern Research  Institute was the first to invent the subject matter of these
patents. In addition,  we are aware of a third party patent which is directed to
the  treatment of chronic  myeloid  leukemia  ("CML")  using  specific  doses of
clofarabine. We do not believe that we will infringe this patent. If this patent
is asserted  against us, even though we may be successful  in defending  against
such an assertion,  our defense would  require  substantial  financial and human
resources.  And, we may need a license to this patent to use the claimed dose in
the treatment of CML. However,  we do not know if such a license is available at
commercially reasonable terms, if at all.

        We could incur substantial costs in defending infringement suits brought
against us or any of our licensors or in asserting any infringement  claims that
we may have against others.  We could also incur substantial costs in connection
with any suits  relating to



                                      -11-




matters for which we have agreed to indemnify our licensors or distributors.  An
adverse  outcome in any litigation  could have a material  adverse effect on our
ability to sell products or use patents in the future. In addition,  we could be
required to obtain licenses under patents or other  proprietary  rights of third
parties.  These licenses may not be made available on terms acceptable to us, or
at all. If we are required to, and do not obtain any required licenses, we could
be  prevented  from,  or  encounter  delays  in,  developing,  manufacturing  or
marketing one or more products.

        We also rely upon  trade  secret  protection  for our  confidential  and
proprietary   information.   Others  may  independently   develop  substantially
equivalent  proprietary  information  and techniques or gain access to our trade
secrets or disclose our technology.  We may not be able to meaningfully  protect
our trade secrets which could limit our ability to exclusively produce products.

        We  require  our  employees,  consultants,  members  of  the  scientific
advisory   board  and   parties   to   collaborative   agreements   to   execute
confidentiality  agreements  upon the  commencement  of employment or consulting
relationships  or a  collaboration  with us.  These  agreements  may not provide
meaningful  protection of our trade secrets or adequate remedies in the event of
unauthorized use or disclosure of confidential and proprietary information.

Because  we have  international  operations,  we will be  subject  to  risks  of
conducting business in foreign countries

        We have the right to manufacture,  market and distribute our lead drugs,
clofarabine and Modrenal(R), in territories outside of the U.S. Specifically, we
currently market  Modrenal(R) in the United Kingdom and upon receiving  European
approval  for  clofarabine,  we  intend to market  the drug  throughout  Europe.
Further,  nearly half of our employees are employed by Bioenvision  Limited, our
wholly-owned subsidiary with offices in Edinburgh, Scotland.

        Because we have international operations in the conduct of our business,
we are  subject  to the  risks of  conducting  business  in  foreign  countries,
including:

        o      difficulty    in    establishing    or   managing    distribution
               relationships;

        o      different standards for the development,  use, packaging, pricing
               and marketing of our products and technologies;

        o      our  inability to locate  qualified  local  employees,  partners,
               distributors and suppliers;

        o      the potential burden of complying with a variety of foreign laws,
               trade  standards  and  regulatory  requirements,   including  the
               regulation of pharmaceutical products and treatment; and

        o      general  geopolitical  risks,  such  as  political  and  economic
               instability,  changes  in  diplomatic  and trade  relations,  and
               foreign currency risks.

        We do not engage in forward  currency  transactions  which  means we are
susceptible to fluctuations  in the U.S. dollar against foreign  currencies such
as the pound  sterling.  Accordingly,  as the value of the dollar becomes weaker
against the pound  sterling,  ongoing  services  provided  by our UK  employees,
Cancer Research  Organizations and other service providers become more expensive
to us. No  assurance  can be given that the U.S.  dollar  will not  continue  to
weaken which could have a material  adverse effect on the costs  associated with
our drug development activities.

We cannot  predict  our  future  capital  needs and we may not be able to secure
additional  financing  which  could  affect  our  ability  to operate as a going
concern

        As of June  30,  2004,  we had  stockholders'  equity  of  approximately
$27,383,000 and net working capital of approximately  $18,828,000.  However,  we
may need  additional  financing to continue to fund the research and development
and  marketing  programs for our  products and to generally  expand and grow our
business.  For example, we will need to employ a European sales force within the
next twelve months to capitalize on the commercial potential for clofarabine and
Modrenal(R)  if and to the extent our lead drugs are at market in Europe by mid-
2005.  To the extent  that we will be  required to fund  operating  losses,  our
financial position would deteriorate.  There can be no assurance that we will be
able to find  significant  additional  financing at all or on terms favorable to
us. If equity securities are issued in connection with a financing,  dilution to
our  stockholders  would result,  and if additional funds are raised through the
incurrence  of debt, we may be subject to  restrictions  on our  operations  and
finances.  Furthermore,  if we do incur debt,  we may be limiting our ability to
repurchase capital stock,  engage in mergers,  consolidations,  acquisitions and
asset sales, or alter our lines of business or accounting  methods,  even though
these actions would otherwise benefit our business.

        If adequate  financing  is not  available,  we may be required to delay,
scale back or  eliminate  some of our  research  and  development  programs,  to
relinquish  rights to certain  technologies  or  products,  or to license  third
parties to  commercialize  technologies or products that we would otherwise seek
to develop.  Any inability to obtain additional  financing,  if required,  would
have a material  adverse  effect on our ability to continue our  operations  and
implement our business plan.



                                      -12-




The prices we charge for our products and the level of third-party reimbursement
may decrease and our revenues could decrease

        Our ability to commercialize  products  successfully  depends in part on
the price we may be able to charge for our  products  and on the extent to which
reimbursement  for the  cost  of our  products  and  related  treatment  will be
available from  government  health  administration  authorities,  private health
insurers and other third-party payors. We believe that Government  officials and
private  health  insurers  are  increasingly  challenging  the price of  medical
products  and  services.  Significant  uncertainty  exists  as  to  the  pricing
flexibility  which  distributors will have with respect to newly approved health
care products as well as the reimbursement  status for such approved  healthcare
products.

        Third-party  payors may attempt to control  costs  further by  selecting
exclusive providers of their pharmaceutical products. If third-party payors were
to make this type of arrangement with one or more of our competitors, they would
not reimburse patients for purchasing our competing products.  For example, if a
third-party  payor in the U.K.  were to pay  patients  for regimens of aromatase
inhibitor  treatment  but not  treatments  of  Modrenal(R),  this would  cause a
decline in sales of Modrenal(R).  This lack of reimbursement  would diminish the
market for products  developed by us and would have a material adverse effect on
us.

Our products may be subject to recall

        Product  recalls may be issued at our  discretion or by the FDA, the FTC
or other  government  agencies  having  regulatory  authority for product sales.
Product recalls,  if any in the future,  may harm our reputation and cause us to
lose development  opportunities,  or customers or pay refunds. Products may need
to be recalled due to disputed labeling claims,  manufacturing  issues,  quality
defects,  or other  reasons.  We do not carry any insurance to cover the risk of
potential  product  recall.  Any product  recall  could have a material  adverse
effect on us, our prospects, our financial condition and results of operations.

We may face  exposure  from  product  liability  claims  and  product  liability
insurance  may not be  sufficient  to cover  the costs of our  liability  claims
related to technologies or products

        We  face  exposure  to  product  liability  claims  if  the  use  of our
technologies  or products or those we license  from third  parties is alleged to
have resulted in adverse  effects to users of such products.  Product  liability
claims may be brought by clinical trial participants,  although to date, no such
claims have been brought against us. If any such claims were brought against us,
the cost of defending such claims may adversely affect our business.  Regulatory
approval for commercial sale of our products does not mitigate product liability
risks.  Any  precautions  we take may not be  sufficient  to  avoid  significant
product  liability  exposure.  Although we have obtained  product  liability and
clinical trial insurance on our  technologies  and products at levels with which
management deems reasonable,  no assurance can be given that this insurance will
cover any  particular  claim or that we have  obtained an  appropriate  level of
liability  insurance  coverage  for our  development  activities.  We  currently
maintain three million dollars per year, claims made product liability insurance
coverage which we believe is adequate.  Existing coverage may not be adequate as
we further develop our products.  In the future,  adequate insurance coverage or
indemnification  by  collaborative  partners may not be available in  sufficient
amounts, or at acceptable costs, if at all. To the extent that product liability
insurance, if available, does not cover potential claims, we will be required to
self-insure the risks associated with those claims. The successful  assertion of
any  uninsured  product  liability  or other  claim  against us could  limit our
ability to sell our  products  or could cause  monetary  damages.  In  addition,
future product  labeling may include  disclosure of additional  adverse effects,
precautions and contra  indications,  which may adversely  impact product sales.
The pharmaceutical industry has experienced increasing difficulty in maintaining
product  liability  insurance  coverage at reasonable  levels,  and  substantial
increases in insurance  premium  costs,  in many cases,  have rendered  coverage
economically impractical.




                                      -13-






                 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

        We have made statements  under the captions "Risk Factors," and in other
sections of this prospectus that are forward-looking  statements. In some cases,
you can  identify  these  statements  by  forward-looking  words  such as "may,"
"might,"  "will,"  "should,"  "expects,"  "plans,"  "anticipates,"   "believes,"
"estimates,"  "predicts," "potential" or "continue," the negative of these terms
and other comparable  terminology.  These  forward-looking  statements which are
subject  to  risks,   uncertainties   and  assumptions  about  us,  may  include
projections  of  our  future  financial   performance,   or  anticipated  growth
strategies and  anticipated  trends in our business.  These  statements are only
predictions  based on our current  expectations  and  projections  about  future
events.  There are important factors that could cause our actual results,  level
of activity,  performance or achievements to differ materially from the results,
level of  activity,  performance  or  achievements  expressed  or implied by the
forward-looking statements,  including those factors discussed under the section
entitled  "Risk  Factors." You should  specifically  consider the numerous risks
outlined under "Risk Factors." Although we believe the expectations reflected in
the  forward-looking  statements  are  reasonable,  we cannot  guarantee  future
results, levels of activity,  performance or achievements.  Moreover, neither we
nor any other person assumes responsibility for the accuracy and completeness or
any of these forward-looking statements.

                                 USE OF PROCEEDS

        The selling  stockholders  will receive the proceeds  from the resale of
the shares of common stock.  We will not receive any proceeds from the resale of
the  shares  of  common  stock  by the  selling  stockholders.  We  may  receive
consideration  upon the  exercise of options and we will  receive  consideration
upon  the  conversion  of  warrants  which  we will  use for  general  corporate
purposes.

        Expenses we are expected to incur in connection  with this  registration
are estimated at approximately  $100,000.  The selling stockholders will pay all
of their underwriting commissions and discounts and counsel fees and expenses in
connection with the resale of the shares covered by this prospectus.

                              SELLING STOCKHOLDERS

        As discussed elsewhere in this prospectus,  the selling stockholders are
individuals  or entities  who or which either hold shares of our common stock or
may  acquire  the same  upon the  conversion  of  preferred  shares  or upon the
exercise of certain  options or warrants  and,  as  discussed  under the caption
"Plan of  Distribution"  below,  may include certain of their pledgees,  donees,
transferees  or  other  successors-in-interest  who  receive  shares  as a gift,
pledge,  partnership  distribution  or  other  non-sale  related  transfer.  The
following table sets forth, as of the date of this prospectus:

        o      the name of each selling stockholder;

        o      the number of shares of common stock  beneficially  owned by each
               selling stockholder;

        o      the  number of shares  of common  stock  that may be sold in this
               offering; and

        o      the number and  percentage of shares of common stock that will be
               beneficially  owned by each  selling  stockholder  following  the
               offering to which this prospectus relates.

        The information with respect to ownership after the offering assumes the
sale of all of the shares  offered and no purchases of  additional  shares.  The
selling  stockholders  may  offer  all or part  of the  shares  covered  by this
prospectus at any time or from time to time.

        For  purposes  of the table  below,  the number of shares  "beneficially
owned" are those  beneficially  owned as determined  under the rules of the SEC.
Such information is not necessarily  indicative of beneficial  ownership for any
other purpose. Under such rules,  beneficial ownership includes any shares as to
which a person  has sole or  shared  voting  power or  investment  power and any
shares for which the person has the right to acquire  such power  within 60 days
through the exercise of any option,  warrant or right, through conversion of any
security  or  pursuant to the  automatic  termination  of a power of attorney or
revocation of a trust, discretionary account or similar arrangement. Percentages
in  the  table  below  are  based  on  28,882,319  shares  of our  common  stock
outstanding as of November 9, 2004.





                                      -14-





                                                 Shares                                               Shares
                                             Owned Prior to                                        Owned After
                                              the Offering             Number of Shares            the Offering
                                              ------------            which may be Sold            ------------
Name                                    Number             Percent     in this Offering        Number          Percent
----                                    ------             -------     ----------------        ------          -------
                                                                                                  
Perseus-Soros BioPharmaceutical
Fund, LP (1)                           9,450,053           24.90%             9,450,053              --             --
Caduceus Private Investments,
LP(2)                                  1,040,410            3.52%               770,482          269,928             *
OrbiMed Associates LLC (2)                21,632                *                16,038            5,594             *
UBS Juniper Crossover Fund,
L.L.C.(2)                                995,698            3.41%               363,516          632,182         2.19%
Special Situations Private
Equity Fund, L.P. (3)                    250,000                *               250,000               --            --
SDS Merchant Fund, LP (4)                144,999                *                48,333           96,666             *
SDS Merchant Fund, LP (5)                354,999            1.21%               118,333          236,666             *
SDS Merchant Fund, LP (6)                380,001            1.31%               166,667          213,334             *
Orion Biomedical Offshore
Fund, LP (7)                             133,875                *                44,625           89,250             *
Orion Biomedical Fund, LP (8)            616,125            2.13%               205,375          410,750         1.42%
Beaver Ltd. (9)                           75,000                *                25,000           50,000             *
CKH Invest Aps. (10)                      50,001                *                16,667           33,334             *
Merlin Nexus I LP (11)                   673,617            2.31%               406,949          266,668             *
Alexandra Global Master Fund,
ltd.(12)                                 310,666            1.07%               310,666               --            --
DWS Investment GmbH (13)               1,360,600            4.71%               493,934          866,666         3.00%
Michael Sistenich (14)                   125,001                *                41,667           83,334             *
Global Biotechnology Fund (15)           209,369                *                76,037          133,332             *
Oklahoma Medical Research
Foundation (16)                           44,166                *                44,166               --            --
Robert A. Floyd (16)                      66,666                *                66,666               --            --
Raymond A. Schinazi (16)                  66,666                *                66,666               --            --
Christopher B. Wood (17)               3,986,571           13.80%             2,319,905        1,666,666         5.77%
Julie Wood (17)                          318,750                *               318,750               --            --
Stuart Smith (18)                        700,000            2.38%               700,000               --            --
Thomas Nelson (19)                       370,959            1.28%               287,523           83,436             *
Kevin Leech (20)                       1,813,912            6.19%               413,912        1,400,000         4.85%
Bioaccelerate, Inc. (21)               1,162,100            3.96%               434,828          727,272         2.52%
Sterling Securities Ltd. (21)             74,045                *                74,045               --            --
Carpe DM, Inc. (21)                       59,058                *                59,058               --            --
Michelle Tidball (21)                    254,114                *               254,114               --            --
Weil Consulting Corporation (21)          75,000                *                75,000               --            --
Kingsley Securities Ltd.  (21)           102,679                *               102,679               --            --
Fontenelle LLC  (21)                      50,000                *                50,000               --           --
George Margetts (22)                     100,000                *               100,000               --            --
Nagy Habib (23)                           46,732                *                46,732               --            --
NAB Holdings Ltd. (21) (24)              451,913            1.56%               451,913               --            --
SCO Capital Partners LLC (25), (27)    7,009,946           24.19%             7,009,946               --            --
SCO Financial Group LLC (25), (27)       100,000                *               100,000               --            --
SCO Securities LLC (25), (27)            260,290                *               260,290
Daniel DiPietro (29)                      50,000                *                50,000               --            --
Jeremy Kaplan                             10,000                *                10,000               --            --
Joshua Golumb                             10,000                *                10,000               --            --
The Sophie C. Rouhandeh Trust(25)        150,000                *               150,000               --            --
The Chloe H. Rouhandeh Trust (25)        150,000                *               150,000               --            --
Jeffrey B. Davis (26), (27), (29)        749,243            2.57%               250,000          499,243         1.73%
Edward W. Kelly (27), (28)               356,013            1.22%               200,000          156,013             *
RRD International, Inc. (30)             130,277                *               130,277               --            --
RLB Capital, Inc. (31)                   100,000                *               100,000               --            --
Stamford Capital (32)                     60,000                *                60,000               --            --
Palladin Opportunity Fund LLC             13,632                *                13,632               --            --
SDS Capital Group SPC, Ltd. (33)         159,802                *               159,802               --            --
Baystar Capital II, L.P. (34)             60,000                *                60,000               --            --
North Sound Legacy Fund, LLC (35)          1,440                *                 1,440               --            --
North Sound Legacy Institutional
Fund,LLC (36)                             15,840                *                15,840               --            --
North Sound Legacy International
Fund, LLC (37)                            30,720                *                30,720               --            --
Vertical Ventures, LLC (38)              115,200                *               115,200               --            --
Iroquois Capital LP (39)                  76,800                *                76,800               --            --
Alpha Capital AG (40)                     96,000                *                96,000               --            --
Millenium Partners LP (41)               120,000                *               120,000               --            --
Jennison Health Sciences Fund (42)       288,000            1.00%               288,000               --            --
BioPharmaceutical Portfolio (43)          30,240                *                30,240               --            --
MP BioPharmaceutical Partners,
L.P. (44)                                 16,680                *                16,680               --            --
MP BioPharmaceutical Fund Ltd. (45)       68,880                *                68,880               --            --
MP BioPharm Market-Neutral, L.P. (46)      4,200                *                 4,200               --            --
Silveroak Invenstments, Inc. (47)         48,000                *                48,000               --            --
SF Capital Partners Ltd. (48)            288,000                                288,000               --            --
Perceptive Lifesciences Master Fund,
Ltd. (49)                                216,000                *               216,000               --            --
Cranshire Capital, L.P. (50)              48,000                *                48,000               --            --



                                      -15-





                                                                                                  
Quogue Capital LLC (51)                   14,000                *                14,000               --            --
Meditor Master Curra Fund
Limited (52)                             192,000                *               192,000               --            --
Atlas Equity I, Ltd. (53)                120,000                *               120,000               --            --
Steve Oliviera (54)                       24,000                *                24,000               --            --
SRG Capital LLC (55)                      24,000                *                24,000               --            --
StoneStreet LP (56)                       60,000                *                60,000               --            --
DKR Soundshore Oasis Holding
Company, Ltd. (57)                        48,000                *                48,000               --            --

Total                                 38,085,080                             30,164,746        7,920,334


* Represents less than 1% of our outstanding shares of common stock.

     (1) Includes  3,000,000  shares  of  Series  A  Preferred  Stock  currently
         convertible  into  6,000,000  shares of common  stock and a warrant  to
         purchase  3,000,000  shares of common  stock  exercisable  at $2.00 per
         share for five years from May 8, 2002.  Also  includes  375,044  common
         shares  and a  warrant  to  purchase  75,009  shares  of  common  stock
         exercisable  at $7.50 for five  years  from May 13,  2004.  Based  upon
         information  contained  in its  report on  Schedule  13D filed with the
         Commission   on  May  20,   2002  and   amended  on  January  8,  2003,
         Perseus-Soros  BioPharmaceutical Fund, L.P. reported that Perseus-Soros
         BioPharmaceutical  Fund, L.P. and Perseus-Soros  Partners may be deemed
         to have  sole  power  to  direct  the  voting  and  disposition  of the
         9,000,000  shares of  common  stock.  By  virtue  of the  relationships
         between  and  among   Perseus-Soros   BioPharmaceutical   Fund,   L.P.,
         Perseus-Soros  Partners,  LLC, Perseus BioTech Fund Partners,  LLC, SFM
         Participation,  L.P., SFM AH, LLC, Frank H. Pearl,  George Soros, Soros
         Fund Management  LLC,  Perseus EC, LLC,  Perseuspur,  LLC, each of such
         Perseus entities, other than Perseus-Soros BioPharmaceutical Fund, L.P.
         and Perseus-Soros  Partners, may be deemed to share the power to direct
         the voting and  disposition  of the  9,000,000  shares of common stock.
         After  the  company's  May  2002  financing,  Perseus-Soros  named  two
         individuals to the company's board of directors.

     (2) Includes  353,693 shares of common stock, a warrant to purchase 669,964
         shares of common  stock  exercisable  at $2.00 per share for five years
         from May 16, 2002,  and a warrant to purchase  16,753  shares of common
         stock  exercisable  at $7.50 for five  years  from May 13,  2004 all of
         which are held by Caduceus  Private  Investments,  LP;  7,338 shares of
         common  stock,  a warrant to  purchase  13,945  shares of common  stock
         exercisable  at $2.00 per share for five years from May 16, 2002, and a
         warrant to purchase 349 shares of common stock exercisable at $7.50 for
         five  years  from  May 13,  2004,  all of  which  are  held by  OrbiMed
         Associates  LLC;  and  671,703  shares of common  stock,  a warrant  to
         purchase 316,091 shares of common stock  exercisable at $2.00 per share
         for five  years from May 16,  2002,  and a warrant  to  purchase  7,904
         shares of common stock exercisable at $7.50 for five years from May 13,
         2004, all of which are held by UBS Juniper Crossover Fund, L.L.C. Based
         upon information contained in its report on Schedule 13G filed with the
         Commission on June 21, 2002,  OrbiMed  Advisors Inc.,  OrbiMed Advisors
         LLC,  OrbiMed  Capital LLC and Samuel D. Isaly reported that they share
         the power to direct the voting and  disposition of the shares of common
         stock.

     (3) Includes  a  Warrant  to  purchase   250,000  shares  of  common  stock
         exercisable at $2.00 per share for five years from May 8, 2002.

     (4) Includes   48,333  shares  of  Series  A  Preferred   Stock   currently
         convertible  into  96,666  shares  of common  stock  and a  warrant  to
         purchase  48,333 shares of common stock  exercisable at $2.00 per share
         for five years from May 8, 2002,  which were sold to SDS Merchant Fund,
         LP by XMark Fund,  LP. All securities  held  registered to SDS Merchant
         Fund, LP are beneficially owned by SDS Capital Group SPC, Ltd.

     (5) Includes   118,333  shares  of  Series  A  Preferred   Stock  currently
         convertible  into  236,666  shares  of common  stock  and a warrant  to
         purchase 118,333 shares of common stock  exercisable at $3.00 per share
         for five years from May 8, 2002,  which were sold to SDS Merchant Fund,
         LP by XMark Fund,  Ltd. All securities  held registered to SDS Merchant
         Fund, LP are beneficially owned by SDS Capital Group SPC, Ltd.

     (6) Includes  213,334  shares of common  stock  and a warrant  to  purchase
         166,667 shares of common stock  exercisable at $2.00 per share for five
         years from May 8, 2002. All securities  held registered to SDS Merchant
         Fund, LP are beneficially owned by SDS Capital Group SPC, Ltd.

     (7) Includes 133,875 shares of common stock resulting from converting their
         Series A Preferred Stock and exercising a warrant on May 25, 2004.

     (8) Includes 616,125 shares of common stock resulting from converting their
         Series A Preferred Stock and exercising a warrant on May 25, 2004.

     (9) Includes 75,000 shares of common stock resulting from converting  their
         Series A Preferred Stock and exercising a warrant on May 7, 2004.



                                      -16-



     (10)Includes  33,334  shares of common  stock  and a  warrant  to  purchase
         16,667 shares of common stock  exercisable  at $2.00 per share for five
         years from May 14, 2002.

     (11)Includes   108,334  shares  of  Series  A  Preferred   Stock  currently
         convertible  into 216,668  shares of common  stock;  444,680  shares of
         common stock and a warrant to purchase 12,269 shares of common stock at
         $7.50  per  share for five  years  from  March  22,  2004.  Based  upon
         information  contained  in its  report on  Schedule  13G filed with the
         Commission on June 28, 2002,  Merlin Nexus I (formerly known as, Merlin
         BioMed Private Equity Fund,  L.P.) reported that it shares the power to
         direct the voting and  disposition  of its shares of common  stock with
         Merlin BioMed Private  Equity,  LLC, its general  partner and Dominique
         Semon, who is the sole managing member of the general partner.

     (12)Includes  120,000 common shares;  a warrant to purchase  166,666 shares
         of common stock  exercisable at $2.00 per share for five years from May
         8,  2002;  and a warrant  to  purchase  24,000  shares of common  stock
         exercisable at $7.50 per share for five years from March 22, 2004.

     (13)Includes  1,350,500  shares of common stock  resulting from  converting
         their Series A Preferred  Stock,  the purchase of an additional  50,501
         shares of common  stock in the March 2004  financing  and  exercising a
         warrant on March 17, 2004.  Also a warrant to purchase 10,100 shares of
         common stock exercisable at $7.50 for five years from May 13, 2004.

     (14)Includes  83,334  shares of common  stock  and a  warrant  to  purchase
         41,667 shares of common stock  exercisable  at $2.00 per share for five
         years from May 16, 2002.

     (15)Includes   66,666  shares  of  Series  A  Preferred   Stock   currently
         convertible  into  133,332  shares  of common  stock  and a warrant  to
         purchase  66,666 shares of common stock  exercisable at $2.00 per share
         for five years from May 14, 2002. Also includes 7,809 common shares and
         a warrant to purchase 1,562 shares of common stock exercisable at $7.50
         for five years from May 13, 2004.

     (16)Under the terms of an amendment to a license  agreement  with  Oklahoma
         Medical Research Foundation,  we issued 200,000 shares of common stock,
         (all of which have been sold) and a  five-year  warrant to  purchase an
         additional  200,000  shares of common  stock.  Such warrant to purchase
         200,000  shares of common stock is  exercisable  at $2.33 per share for
         five years from May 14, 2002.  On February 17, 2004,  Oklahoma  Medical
         Research  Foundation did a non-sale transfer of its warrant to purchase
         66,666 shares of common stock to Dr. Robert A. Floyd and its warrant to
         purchase  66,666 shares of common stock to Dr. Raymond A. Schinazi.  On
         April 12, 2004,  Oklahoma  Medical  Research  Foundation  converted its
         warrant into common shares and has 44,166 of such shares remaining.

     (17)Dr.  Wood is  Chairman  and Chief  Executive  Officer  of the  Company.
         Excludes 318,750 shares of common stock owned by Julie Wood, Dr. Wood's
         spouse, as to which Dr. Wood disclaims any beneficial interest.

     (18)Includes  options to acquire  450,000  shares of the common stock which
         are exercisable at $1.25 per share for five years from April 30, 2001.

     (19)Includes  options to acquire  200,000  shares of the common stock which
         are exercisable at $1.25 per share for five years from April 30, 2001.

     (20)These  shares  are owned of  record  by  Phoenix  Ventures  Limited,  a
         Channel  Islands  (Jersey)  corporation,  which,  to our knowledge,  is
         wholly-owned by Kevin Leech.

     (21)Bioaccelerate,  Inc. is a BVI  corporation,  owned of record by several
         private  investors.  On  October 8, 2003,  certain  options  originally
         issued to Bioaccelerate, Inc. were transferred as follows:

         (i)   NABHoldings  Ltd.  received options to purchase 500,000 shares of
               common  stock,  350,000 of which  were  transferred  to  Michelle
               Tidball on December 9, 2003;  on February  20,  2004,  they did a
               cashless  exercise of their remaining  option to purchase 150,000
               shares of  common  stock and  received  123,666  shares of common
               stock;

         (ii)  Sterling  Securities Ltd.  received  options to purchase  100,000
               shares of common stock;

         (iii) Carpe DM,  Inc.  received  options to purchase  80,000  shares of
               common stock;

         (iv)  Michelle  Tidball  received options to purchase 100,000 shares of
               common stock;

                                      -17-



         (v)   Kingsley  Securities Ltd.  received  options to purchase  124,544
               shares  of common  stock and on  February  20,  2004,  they did a
               cashless  exercise of this option and received  102,679 shares of
               common stock; and

         (vi)  Fontenelle  LLC  received  options to purchase  50,000  shares of
               common  stock,  which it  exercised  in November  2003 for 50,000
               shares of common stock.

         Further, on November 25, 2003, the following recipients of such options
         executed a cashless exercise of such options and received the following
         shares of the Company's common stock:

         (i)   Sterling Securities Ltd. received 74,045 shares of common stock;

         (ii)  Carpe DM, Inc. received 59,058 shares of common stock; and

         (iii) Michelle  Tidball  received  73,811  shares of common  stock.  On
               December 16, 2003,  Ms. Tidball  executed a cashless  exercise of
               350,000  options  transferred  to her by NAB  Holdings  Inc.  and
               received  255,303  shares of the Company's  common  stock,  which
               includes 75,000 shares issued to Weil Consulting Corporation.

         Barbara Platts,  in her capacity as Managing Director of Bioaccelerate,
         Inc.,  has  investment  power and voting  power  with  respect to these
         shares, but disclaims any beneficial ownership thereof.

     (22)Includes  an  option  to  purchase   100,000  shares  of  common  stock
         exercisable at $1.25 per share for five years from April 30, 2001.

     (23)Includes  an  option  to  purchase   30,000   shares  of  common  stock
         exercisable at $1.25 per share for five years from April 30, 2001.

     (24)Includes  an  option  to  purchase   450,000  shares  of  common  stock
         exercisable  at $1.25 per share for five years from April 30, 2001.  On
         December  16, 2003,  NAB  Holdings  Ltd.  exercised  these  options and
         received  328,247  shares  of  common  stock  pursuant  to  a  cashless
         exercise.

     (25)Includes  a warrant  to  purchase  1,200,000  shares  of  common  stock
         exercisable  at $1.25 per share for five years from  November  16, 2001
         issued to SCO  Capital,  LLC; a warrant to purchase  688,333  shares of
         common stock  exercisable at $1.50 per share for five years from May 8,
         2002 issued to SCO Capital,  LLC; a warrant to purchase  100,000 shares
         of common  stock  exercisable  at $1.25 per share for five  years  from
         November 16, 2001 issued to SCO Securities,  LLC; a warrant to purchase
         150,000 shares of common stock  exercisable at $1.25 per share for five
         years from November 16, 2001 held by the Sophie C. Rouhandeh Trust; and
         a warrant to purchase 150,000 shares of common stock at $1.25 per share
         for five years from  November  16, 2001 held by the Chloe H.  Rouhandeh
         Trust. Steven H. Rouhandeh, in his capacity as President of SCO Capital
         Partners,  LLC and  trustee of the  trusts,  has  investment  power and
         voting power with respect to these shares, but disclaims any beneficial
         ownership  thereof.  Excludes a warrant to  purchase  70,000  shares of
         common stock  exercisable at $1.50 per share for five years from May 8,
         2002  which were  originally  held by SCO  Financial  Group,  LLC,  but
         transferred  to  (i)  Daniel  DiPietro  (50,000),  (ii)  Jeremy  Kaplan
         (10,000),  and (iii) Joshua Golumb  (10,000).  SCO Financial Group, LLC
         served as a financial  advisor to the Company  through May 2004 and SCO
         Capital Partners,  LLC extended a $1 million secured credit facility to
         the Company in November 2001. SCO  Securities,  LLC, a related  entity,
         served  as  placement  agent  to the  Company  in  connection  with the
         Company's  May 2002 and March  and May 2004  financings.  As  placement
         agent  in  connection  with  the  March  and May  2004  financing,  SCO
         Securities, LLC received a warrant to purchase 204,452 shares of common
         stock exercisable at $6.25 per share for five years from March 22, 2004
         and a warrant to purchase 55,838 shares of common stock  exercisable at
         $6.25 per share for five years from May 13, 2004.

     (26)Includes  a  warrant  to  purchase   250,000  shares  of  common  stock
         exercisable  at $1.50 per share for five years  from May 8,  2002.  Mr.
         Davis is the President of SCO Financial  Group LLC, an affiliate of SCO
         Capital Partners LLC. Mr. Davis disclaims  beneficial  ownership of all
         shares  of  common  stock  deemed  beneficially  owned  by SCO  Capital
         Partners LLC.

     (27)Indicates  the  selling   stockholder  was  a  former   stockholder  of
         Pathagon.

     (28)Mr.  Kelly has  executed a  consulting  agreement  with us  pursuant to
         which we issued to him 200,000 shares of common stock which vested over
         an eighteen month period.

     (29)Indicates  the  selling  stockholder  is  a  current  employee  of  SCO
         Financial Group LLC.


                                      -18-



     (30)Includes  130,277  shares of common stock  resulting  from the cashless
         exercise of a warrant to  purchase  175,000  shares of common  stock on
         July 21, 2004.

     (31)Includes  a  warrant  to  purchase   100,000  shares  of  common  stock
         exercisable at $1.25 per share for three years from March 8, 2004.

     (32)Includes  a  warrant  to  purchase   60,000   shares  of  common  stock
         exercisable  at $1.80 per share at anytime  from March 4, 2004  through
         February 23, 2007.

     (33)Includes  133,168 shares of common stock and warrant to purchase 26,634
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (34)Includes  50,000 shares of common stock and warrant to purchase  10,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (35)Includes  1,200  shares of common  stock and  warrant to  purchase  240
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (36)Includes  13,200  shares of common stock and warrant to purchase  2,640
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (37)Includes  25,600  shares of common stock and warrant to purchase  5,120
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (38)Includes  96,000 shares of common stock and warrant to purchase  19,200
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (39)Includes  64,000 shares of common stock and warrant to purchase  12,800
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (40)Includes  80,000 shares of common stock and warrant to purchase  16,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (41)Includes  100,000 shares of common stock and warrant to purchase 20,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (42)Includes  240,000 shares of common stock and warrant to purchase 48,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (43)Includes  25,200  shares of common stock and warrant to purchase  5,040
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (44)Includes  13,900  shares of common stock and warrant to purchase  2,780
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (45)Includes  57,400 shares of common stock and warrant to purchase  11,480
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (46)Includes  3,500  shares of common  stock and  warrant to  purchase  700
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (47)Includes  40,000  shares of common stock and warrant to purchase  8,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (48)Includes  240,000 shares of common stock and warrant to purchase 48,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (49)Includes  180,000 shares of common stock and warrant to purchase 36,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.


                                      -19-



     (50)Includes  40,000  shares of common stock and warrant to purchase  8,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (51)Includes  a  warrant  to  purchase   14,000   shares  of  common  stock
         exercisable at $7.50 per share for five years from March 22, 2004.

     (52)Includes  160,000 shares of common stock and warrant to purchase 32,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (53)Includes  100,000 shares of common stock and warrant to purchase 20,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (54)Includes  20,000  shares of common stock and warrant to purchase  4,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (55)Includes  20,000  shares of common stock and warrant to purchase  4,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (56)Includes  50,000 shares of common stock and warrant to purchase  10,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.

     (57)Includes  40,000  shares of common stock and warrant to purchase  8,000
         shares of common  stock  exercisable  at $7.50 per share for five years
         from March 22, 2004.


                              PLAN OF DISTRIBUTION

        The shares covered by this  prospectus may be offered and sold from time
to time by the selling stockholders.  The term "selling  stockholders"  includes
pledgees,  donees,  transferees or other  successors in interest  selling shares
received after the date of this  prospectus  from the selling  stockholders as a
pledge, gift,  partnership  distribution or other non-sale related transfer. The
number of shares beneficially owned by each selling stockholder will decrease as
and when it effects any such transfers. The plan of distribution for the selling
stockholders' shares sold hereunder will otherwise remain unchanged, except that
the  transferees,   pledgees,   donees  or  other  successors  will  be  selling
stockholders  hereunder.  To the extent required, we may amend and/or supplement
this prospectus from time to time to describe a specific plan of distribution.

        The  selling  stockholders  will  act  independently  of  us  in  making
decisions with respect to the timing,  manner and size of each sale. The selling
stockholders may offer their shares from time to time pursuant to one or more of
the following methods:

        o       on Nasdaq or on any other  market on which our common  stock may
from time to time be trading;

        o       one or more  block  trades  in which  the  broker  or  dealer so
engaged  will  attempt  to sell the  shares  of  common  stock as agent  but may
position  and  resell a portion  of the block as  principal  to  facilitate  the
transaction;

        o       purchases by a broker or dealer as  principal  and resale by the
broker or dealer for its account pursuant to this prospectus;

        o       ordinary  brokerage  transactions  and transactions in which the
broker solicits purchasers;

        o       in public or privately-negotiated transactions;

        o       through  the   writing  of  options  on  the   shares;   through
underwriters,  brokers  or  dealers  (who may act as  agents or  principals)  or
directly to one or more purchasers;

        o       an  exchange  distribution  in  accordance  with the rules of an
exchange; through agents;

        o       through  market  sales,  both  long  or  short,  to  the  extent
permitted  under the federal  securities  laws; or in any  combination  of these
methods.

        The sale price to the public may be:

        o       the market price prevailing at the time of sale;


                                      -20-



        o       a price related to the prevailing market price;

        o       at negotiated prices; or

        o       any other prices as the selling  stockholder  may determine from
                time to time.

        In connection with distributions of the shares or otherwise, the selling
stockholders may enter into hedging  transactions  with  broker-dealers or other
financial institutions, which may in turn engage in short sales of the shares in
the course of hedging the positions they assume;

        o       sell the shares short and redeliver the shares to close out such
                short positions;

        o       enter into option or other  transactions with  broker-dealers or
                other financial  institutions which require the delivery to them
                of shares  offered  by this  prospectus,  which they may in turn
                resell; and

        o       pledge shares to a broker-dealer or other financial institution,
                which, upon a default, they may in turn resell.

        In addition to the foregoing methods, the selling stockholders may offer
their shares from time to time in transactions  involving  principals or brokers
not otherwise  contemplated above, in a combination of such methods as described
above or any other lawful methods.

        Sales through brokers may be made by any method of trading authorized by
any  stock  exchange  or market on which  the  shares  may be listed or  quoted,
including  block  trading  in  negotiated  transactions.  Without  limiting  the
foregoing,  such  brokers  may act as  dealers by  purchasing  any or all of the
shares covered by this prospectus,  either as agents for others or as principals
for their own accounts, and reselling such shares pursuant to this prospectus. A
selling stockholder may effect such transactions directly, or indirectly through
underwriters,  broker-  dealers or agents acting on their  behalf.  In effecting
sales,  brokers and dealers engaged by the selling  stockholders may arrange for
other brokers or dealers to participate.

        Upon our being  notified by the selling  stockholders  that any material
arrangement  has been entered into with a  broker-dealer  for the sale of shares
offered hereby through a block trade, special offering, exchange distribution or
secondary  distribution  or a  purchase  by a broker or  dealer,  we will file a
supplement to this  prospectus,  if required,  pursuant to Rule 424(b) under the
Securities Act, disclosing:

        o       the names of the selling stockholder(s) and of the participating
                broker-dealer(s), identifying them as underwriters, as required;

        o       the number of shares involved;

        o       the price at which such shares were sold;

        o       the commissions paid or discounts or concessions allowed to such
                broker-dealer(s), where applicable; and

        o       other facts material to the transaction.

        The shares may also be sold  pursuant  to Rule 144 under the  securities
act,  which permits  limited resale of shares  purchased in a private  placement
subject  to the  satisfaction  of certain  conditions,  including,  among  other
things,  the availability of certain current public  information  concerning the
issuer, the resale occurring following the required holding period under 144 and
the  number of shares  during  any  three-month  period  not  exceeding  certain
limitations.  The selling stockholders have the sole and absolute discretion not
to accept any  purchase  offer or make any sale of their shares if they deem the
purchase price to be unsatisfactory at any particular time.

        The  selling   stockholders  or  their  respective   pledgees,   donees,
transferees or other  successors in interest,  may also sell the shares directly
to market makers acting as principals and/or broker-dealers acting as agents for
themselves or their customers.  These broker-dealers may receive compensation in
the form of discounts,  concessions or commissions from the selling stockholders
and/or the purchasers of shares for whom these  broker-dealers may act as agents
or to whom they sell as principal or both, which compensation as to a particular
broker-dealer  might be in excess of customary  commissions.  Market  makers and
block  purchasers  purchasing the shares will do so for their own account and at
their own risk.  It is possible  that the selling  stockholders  will attempt to
sell  shares of common  stock in block  transactions  to market  makers or other
purchasers at a price per share which may be below the


                                      -21-



then market price. The selling stockholders cannot assure that all or any of the
shares  offered by this  prospectus  will be issued to, or sold by, the  selling
stockholders  if they do not  exercise or convert the common  stock  equivalents
that they own. The selling stockholders and any brokers, dealers or agents, upon
effecting  the sale of any of the  shares  offered  by this  prospectus,  may be
deemed  "underwriters"  as that term is defined under the  securities act or the
exchange act, or the rules and regulations  under those acts. In that event, any
commissions  received  by the  broker-dealers  or agents  and any  profit on the
resale  of the  shares  of common  stock  purchased  by them may be deemed to be
underwriting commissions or discounts under the securities act.

        The selling stockholders, alternatively, may sell all or any part of the
shares offered by this prospectus through an underwriter. To our knowledge, none
of the selling  stockholders  have entered into any agreement with a prospective
underwriter  and  there  can be no  assurance  that any such  agreement  will be
entered  into.  If the  selling  stockholders  enter into such an  agreement  or
agreements,  then  we will  set  forth  in a  post-effective  amendment  to this
prospectus the following information:

        o       the number of shares being offered;

        o       the terms of the  offering,  including  the name of any  selling
                stockholder, underwriter, broker, dealer or agent;

        o       the purchase price paid by any underwriter;

        o       any discount, commission and other underwriter compensation;

        o       any discount,  commission or concession  allowed or reallowed or
                paid to any dealer;

        o       the proposed selling price to the public; and

        o       other facts material to the transaction.

        We will also file such agreement or agreements.  In addition,  if we are
notified by the selling stockholders that a donee, pledgee,  transferee or other
successor-in-interest intends to sell more than 500 shares, a supplement to this
prospectus will be filed.

        The selling stockholders and any other persons participating in the sale
or  distribution  of the shares will be subject to applicable  provisions of the
exchange act and the rules and  regulations  under the exchange act,  including,
without  limitation,   Regulation  M.  These  provisions  may  restrict  certain
activities  of, and limit the timing of purchases and sales of any of the shares
by, the  selling  stockholders  or any other  such  person.  Furthermore,  under
Regulation M, persons  engaged in a  distribution  of securities  are prohibited
from simultaneously  engaging in market making and certain other activities with
respect  to the same  securities  for a  specified  period of time  prior to the
commencement of the distribution, subject to specified exceptions or exemptions.
All of these limitations may affect the marketability of the shares.

        We have agreed to pay all costs and expenses incurred in connection with
the  registration  of the shares  offered by this  prospectus,  except  that the
selling  stockholder will be responsible for all selling  commissions,  transfer
taxes and related  charges in  connection  with the offer and sale of the shares
and the fees of the selling stockholder's counsel.

        We have agreed with the selling  stockholders  to keep the  registration
statement of which this prospectus forms a part continuously effective until the
earlier  of the date that the  shares  covered  by this  prospectus  may be sold
pursuant  to Rule  144(k)  of the  securities  act and the date  that all of the
shares registered for sale under this prospectus have been sold.

        We  have  agreed  to  indemnify  the  selling  stockholders,   or  their
respective  transferees or assignees,  against  certain  liabilities,  including
liabilities  under the  securities  act, or to  contribute  to payments that the
selling stockholders or their respective pledgees,  donees, transferees or other
successors in interest, may be required to make in respect of those liabilities.


                            DESCRIPTION OF SECURITIES

Description of Common Stock

        Number  of  Authorized  and  Outstanding   Shares.  Our  Certificate  of
Incorporation  authorizes  the issuance of  70,000,000  shares of common  stock,
$.001 par value per  share,  of which  28,882,319  shares  were  outstanding  on
November 9, 2004. All of the  outstanding  shares of common stock are fully paid
and non-assessable.


                                      -22-



        Voting  Rights.  Holders of shares of common  stock are  entitled to one
vote for each share on all matters to be voted on by the  stockholders.  Holders
of common stock have no cumulative voting rights. Accordingly,  the holders of a
simple  majority  of the  outstanding  common  stock  and  Series A  convertible
preferred stock, voting together as a class at a stockholders meeting at which a
quorum is present,  can elect all of the directors nominated for election at the
meeting.

        Other. Holders of common stock have no preemptive rights to purchase our
common  stock.  There are no  conversion  rights or  redemption  or sinking fund
provisions with respect to the common stock.

        Transfer  Agent.  Shares of common stock are  registered at the transfer
agent and are  transferable  at such  office by the  registered  holder (or duly
authorized  attorney) upon surrender of the common stock  certificate,  properly
endorsed.  No transfer  shall be registered  unless we are  satisfied  that such
transfer  will not  result in a  violation  of any  applicable  federal or state
securities  laws.  The transfer  agent for our common stock is Liberty  Transfer
Company, 274B New York Avenue,  Huntington,  New York 11743, Attention: Ms. Lisa
Conger.

Description of Preferred Stock

        Number of Authorized Shares. Our certificate of incorporation authorizes
the issuance of up to 20,000,000  shares of preferred stock, par value $.001 per
share, in one or more series with such  limitations  and  restrictions as may be
determined in the sole  discretion  of our board of  directors,  with no further
authorization by stockholders required for the creation and issuance thereof.

        We have designated  5,920,000  shares of our preferred stock as Series A
convertible   preferred  stock,  of  which  3,275,000  shares  were  issued  and
outstanding  as of  November 9, 2004.  The  holders of the Series A  convertible
preferred stock vote as a single class with the common stock, on an as-converted
basis, on all matters upon which the holders of the common stock are entitled to
vote.  Each  outstanding  share of  Series A  convertible  preferred  stock  may
currently be converted  into two shares of common stock.  The shares of Series A
convertible  preferred stock shall be  automatically  convertible into shares of
common  stock if the market  price of the common  stock  after one year from the
date of  issuance  is $10.00  or more for 30  consecutive  trading  days and the
trading  volume is at least  150,000  shares per  trading day during such 30-day
period.  Holders of Series A  convertible  preferred  stock  have a  liquidation
preference  over  holders  of common  stock of $3.00 per  share.  Holders of the
Series A convertible preferred stock are entitled to an annual 5% dividend which
may be paid in cash or additional shares of common stock in our sole discretion.

Warrants

        As of November 9, 2004, there were  outstanding  warrants to purchase an
aggregate of 8,475,868 shares of our common stock, exercisable at prices ranging
from  $1.25 to $7.50 per  share.  The  weighted  average  exercise  price of the
warrants is $2.36.

Stock Options

        As of November 9, 2004,  there were  outstanding  options to purchase an
aggregate of 4,441,000 shares of our common stock, exercisable at prices ranging
from $0.735 to $8.25 per share, of which,  options to purchase  3,133,334 shares
were exercisable. The weighted average exercise price of the options is $1.84.


                                      -23-



                                  LEGAL MATTERS

        The  validity of the shares of common stock  offered by this  prospectus
and other legal  matters  relating to this  offering  will be passed on by Paul,
Hastings, Janofsky & Walker LLP, New York, New York.

                                     EXPERTS

        Our  auditors  are  Grant  Thornton  LLP.  Our  consolidated   financial
statements  as at and for the  years  ended  June 30,  2004  and  June 30,  2003
included  in our annual  report on Form  10-KSB for the year ended June 30, 2004
and incorporated by reference herein, have been incorporated by reference herein
in reliance upon the report of Grant Thornton LLP, independent registered public
accountants,  given on the authority of said firm as experts in  accounting  and
auditing.

                       WHERE YOU CAN GET MORE INFORMATION

        We file annual,  quarterly and special  reports,  proxy  statements  and
other  information  with the SEC.  You may read and copy any  materials  we have
filed with the SEC at the SEC's public reference rooms. The SEC also maintains a
web site  (http://www.sec.gov) that contains reports, proxy statements and other
information concerning us. Please call the SEC at 1-800-SEC-0330 for information
concerning the operations of the public  reference rooms or visit the SEC at the
following locations:

           Public Reference Room             Midwest Regional Office
           450 Fifth Street                  Citicorp Center
           Room 1024                         500 West Madison Street
           Washington, D.C. 20549            Suite 1400
                                             Chicago, Illinois 60661-2511


        We have filed with the SEC a  registration  statement  on Form S-3 under
the Securities Act to register the securities to be sold in this offering.  This
prospectus, which is part of the registration statement, does not contain all of
the  information  set forth in the  registration  statement  or the exhibits and
schedules  to the  registration  statement.  For further  information  regarding
Bioenvision and our securities,  please refer to the registration  statement and
the documents filed as exhibits to the registration statement.

                           INCORPORATION BY REFERENCE

        The SEC allows us to  "incorporate by reference" the information we file
with it,  which  means  that we can  disclose  important  information  to you by
referring  you  to  those  filed  documents.  The  information  incorporated  by
reference is considered to be part of this  prospectus,  and information that we
file  later  with  the  SEC  will   automatically   update  and  supersede  this
information.

        The  following  document,  which has been filed with the SEC,  is hereby
incorporated by reference:

        o       Our  annual  report on Form  10-KSB  for the year ended June 30,
                2004 filed on September 24, 2004 (File No. 001-31787); and

        o       Our  quarterly  report  on Form  10-QSB  for the  quarter  ended
                September 30, 2004 (file No. 001-31787).

        All other  reports and documents  subsequently  filed by us with the SEC
pursuant to Sections 13(a),  13(c),  14 or 15(d) of the Securities  Exchange Act
after the date of this  prospectus and prior to the  termination of the offering
are deemed incorporated by reference into this prospectus and a part hereof from
the date of filing of those documents.  Any statement  contained in any document
incorporated  by reference  shall be deemed to be modified or superseded for the
purposes of this prospectus to the extent that a statement  contained in a later
document  modifies or supersedes such  statement.  Any statements so modified or
superseded shall not be deemed to constitute a part of this  prospectus,  except
as modified or superseded.

        We will provide without charge to each person to whom this prospectus is
delivered,  upon written or oral request of such person, a copy of any or all of
the  documents  referred  to above  which  have been or may be  incorporated  by
reference  into this  prospectus  (other than the  exhibits to such  documents).
Requests for such  documents  should be directed to  Bioenvision  Inc., 345 Park
Avenue,  41st  Floor,  New  York,  New York  10154,  Attention:  David  P.  Luci
(telephone: (212) 750-6700).

        We have not authorized  any dealer,  salesperson or other person to give
any  information  or represent  anything not contained in this  prospectus.  You
should not rely on any unauthorized information.  This prospectus does not offer
to sell or solicit an offer to buy any shares in any jurisdiction in which it is
unlawful.  The  information in this  prospectus is current as of the date on the
cover.


                                      -24-



              DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
                         FOR SECURITIES ACT LIABILITIES

        Our bylaws  provide that  directors and officers shall be indemnified by
us to the fullest extent  authorized by the Delaware  General  Corporation  Law,
against all expenses and  liabilities  reasonably  incurred in  connection  with
services for us or on our behalf.

        Insofar as indemnification  for liabilities arising under the Securities
Act might be permitted to directors, officers or persons controlling our company
under the provisions  described above, we have been informed that in the opinion
of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable.


                                      -25-



                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution.

The following sets forth the estimated  expenses  payable in connection with the
preparation and filing of this Registration:

*Printing and Engraving Expenses................................      15,000
*Accounting Fees and Expenses...................................      15,000
*Legal Fees and Expenses........................................      50,000
*Blue Sky Fees and Expenses.....................................       2,000
*Transfer Agent's and Registrar's Fees and Expenses.............       1,000
*Miscellaneous..................................................      17,000
                                                                      ------

                  *Total........................................    $100,000
                  ======                                            ========

*  Estimated.

Item 15. Indemnification of Directors and Officers.

        The  indemnification  of officers  and  directors of the  Registrant  is
governed by Section 145 of the General  Corporation Law of the State of Delaware
(the "DGCL") and the Certificate of  Incorporation,  as amended,  and By-Laws of
the  Registrant.  Subsection  (a) of DGCL Section 145 empowers a corporation  to
indemnify  any person who was or is a party or is  threatened to be made a party
to any  threatened,  pending or completed  action,  suit or proceeding,  whether
civil, criminal,  administrative or investigative (other than an action by or in
the right of the  corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the  request of the  corporation  as a director,  officer,  employee or agent of
another  corporation,  partnership,  joint venture,  trust or other  enterprise,
against expenses (including attorneys' fees), judgments,  fines and amounts paid
in settlement  actually and reasonably incurred by the person in connection with
such  action,  suit or  proceeding  if the person acted in good faith and in the
manner  the  person  reasonably  believed  to be in or not  opposed  to the best
interests  of the  corporation,  and,  with  respect to any  criminal  action or
proceeding,  had no  reasonable  cause  to  believe  the  person's  conduct  was
unlawful.

        Subsection  (b) of DGCL Section 145 empowers a corporation  to indemnify
any  person  who was or is a party  or is  threatened  to be made a party to any
threatened,  pending  or  completed  action  or suit by or in the  right  of the
corporation  to procure a  judgment  in its favor by reason of the fact that the
person is or was a director,  officer, employee or agent of the corporation,  or
is or was serving at the  request of the  corporation  as a  director,  officer,
employee or agent of another corporation,  partnership,  joint venture, trust or
other  enterprise  against  expenses  (including  attorneys'  fees) actually and
reasonably incurred by the person in a connection with the defense or settlement
of such  action or suit if the person  acted in good faith and in the manner the
person reasonably  believed to be in or not opposed to the best interests of the
corporation and except that no  indemnification  shall be made in respect of any
claim,  issue or matter as to which such person  shall have been  adjudged to be
liable to the corporation  unless and only to the extent that the Delaware Court
of  Chancery  or the  court in which  such  action  or suit  was  brought  shall
determine upon  application  that,  despite the adjudication of liability but in
view of all the  circumstances of the case, such person is fairly and reasonably
entitled  to  indemnity  for such  expenses  which the Court of Chancery or such
other court shall deem proper.

        DGCL Section 145 further  provides  that to the extent that to a present
or former director or officer is successful,  on the merits or otherwise, in the
defense of any action, suit or proceeding referred to in subsections (a) and (b)
of Section 145, or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses  (including  attorneys' fees) actually and
reasonably  incurred by such  person in  connection  therewith.  In all cases in
which  indemnification  is permitted under subsection (a) and (b) of Section 145
(unless  ordered  by a  court),  it  shall  be made by the  corporation  only as
authorized in the specific case upon a determination that indemnification of the
present  or  former  director,  officer,  employee  or  agent is  proper  in the
circumstances  because  the  applicable  standard of conduct has been met by the
party to be  indemnified.  Such  determination  must be made,  with respect to a
person who is a director or officer at the time of such determination,  (1) by a
majority  vote of the  directors  who are no  parties  to such  action,  suit or
proceeding,  even  though  less than a  quorum,  or (2) by a  committee  of such
directors designated by majority vote of such directors, even though less than a
quorum,  or (3) if there are no such directors,  or if such directors so direct,
by independent  legal counsel in a written opinion,  or (4) by the stockholders.
The statute authorizes the corporation to pay expenses incurred by an officer or
director in advance of the final  disposition of a proceeding upon receipt of an
undertaking  by or on behalf of the person to whom the advance will be made,  to
repay the advances if it shall ultimately be determined that he was not entitled
to  indemnification.  DGCL Section 145 also  provides that  indemnification  and
advancement  of expenses  permitted  thereunder  are not to be  exclusive of any
other rights to which those seeking  indemnification  or advancement of expenses
may  be  entitled  under  any  By-law,   agreement,   vote  of  stockholders  or
disinterested  directors,  or otherwise.  DGCL Section 145 also  authorizes  the
corporation to purchase and maintain


                                      II-1



liability insurance on behalf of its directors,  officers,  employees and agents
regardless  of  whether  the  corporation  would  have  the  statutory  power to
indemnify such persons against the liabilities insures.

        Article Seventh of the Certificate of  Incorporation  of the Registrant,
as amended  (the  "Certificate"),  provides  that no director of the  Registrant
shall be personally  liable to the Registrant or its  stockholders  for monetary
damages for breach of fiduciary duty as a director  except for liability (i) for
any  breach  of  the  director's  duty  of  loyalty  to  the  Registrant  or its
stockholders,  (ii) for acts or  omissions  not in good  faith or which  involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the  DGCL  (involving   certain   unlawful   dividends  or  stock  purchases  or
redemptions),  or (iv) for any  transaction  from which the director  derived an
improper personal benefit.

        Pursuant to Section 145(g) of the DGCL,  the  Registrant's  By-Laws,  as
amended,  authorize the Registrant to obtain  insurance to protect  officers and
directors  from certain  liabilities,  including  liabilities  against which the
Registration cannot indemnify its officers and directors.

        In derivative  actions,  Bioenvision may only protect from liability its
officers,  directors,   employees  and  agents  against  expenses  actually  and
reasonably  incurred in connection with the defense or settlement of a suit, and
only if they acted in good faith and in a manner they reasonably  believed to be
in, or not opposed to, the best interests of the corporation. Indemnification is
not  permitted  in the event that the  director,  officer,  employee or agent is
actually adjudged liable to Bioenvision unless, and only to the extent that, the
court in which the action was brought so determines.

        Bioenvision's  Certificate of  Incorporation  permits it to protect from
liability its directors except in the event of: (1) any breach of the director's
duty of loyalty to  Bioenvision or its  stockholders;  (2) any act or failure to
act that is not in good faith or involves  intentional  misconduct  or a knowing
violation of the law; (3)  liability  arising  under Section 174 of the Delaware
General Corporation Law, relating to unlawful stock purchases,  redemptions,  or
payment of dividends;  or (4) any transaction in which the director  received an
improper personal benefit.


Item 16. Exhibits

    Exhibit
    Number                                   Description
    -------                                  -----------
         5.1                  Opinion of Paul, Hastings, Janofsky & Walker, LLP
        23.1                  Consent of Grant Thornton LLP
        23.2                  Consent of Paul, Hastings, Janofsky & Walker LLP
                              (included in Exhibit 5.1)
        24.1                  Power of Attorney (appears on signature page)

Item 17. Undertakings.

        (a)     The undersigned registrant hereby undertakes:

                (1) To file,  during  any  period  in which  offers or sales are
                being made,  a  post-effective  amendment  to this  registration
                statement:

                        (i)  To  include  any  prospectus  required  by  section
                        10(a)(3) of the Securities Act of 1933, as amended.

                        (ii) To  reflect in the  prospectus  any facts or events
                        arising  after the  effective  date of the  registration
                        statement (or the most recent  post-effective  amendment
                        thereof)  which,   individually  or  in  the  aggregate,
                        represent a fundamental  change in the  information  set
                        forth in the registration statement. Notwithstanding the
                        foregoing,   any  increase  or  decrease  in  volume  of
                        securities   offered  (if  the  total  dollar  value  of
                        securities  offered  would  not  exceed  that  which was
                        registered)  and any deviation  from the low or high end
                        of the estimated maximum offering range may be reflected
                        in the form of prospectus  filed with the Securities and
                        Exchange  Commission pursuant to Rule 424(b), if, in the
                        aggregate, the changes in volume and price represent not
                        more than a 20% change in the maximum aggregate offering
                        price set forth in the "Calculation of Registration Fee"
                        table in the effective registration statement.


                                      II-2



                        (iii)To include any material information with respect to
                        the plan of distribution not previously disclosed in the
                        registration  statement or any  material  change to such
                        information in the registration statement.

                                Provided, however, that paragraphs (a)(1)(i) and
                                (a)(1)(ii)  do not  apply  if  the  registration
                                statement is on Form S-3, Form S-8, or Form F-3,
                                and the information required to be included in a
                                post-effective  amendment by those paragraphs is
                                contained  in  periodic  reports  filed  by  the
                                registrant  pursuant  to  Section 13 or 15(d) of
                                the  Securities  Exchange  Act of 1934  that are
                                incorporated  by reference  in the  registration
                                statement.

                (2) That, for the purpose of determining any liability under the
                Securities Act of 1933, each such post-effective amendment shall
                be deemed to be a new  registration  statement  relating  to the
                securities offered therein,  and the offering of such securities
                at that  time  shall  be  deemed  to be the  initial  bona  fide
                offering thereof.

                (3) To remove  from  registration  by means of a  post-effective
                amendment any of the securities  being  registered  which remain
                unsold at the termination of this offering.


        (b)     The undersigned  registrant hereby undertakes that, for purposes
                of determining  any liability  under the Securities Act of 1933,
                each  filing  of the  registrant's  annual  report  pursuant  to
                Section 13(a) or Section 15(d) of the Securities Exchange Act of
                1934 (and, where applicable,  each filing of an employee benefit
                plan's annual report pursuant to Section 15(d) of the Securities
                Exchange Act of 1934) that is  incorporated  by reference in the
                registration  statement shall be deemed to be a new registration
                statement  relating to the securities  offered therein,  and the
                offering of such  securities  at that time shall be deemed to be
                the initial bona fide offering thereof.

        (c)     Insofar as  indemnification  for  liabilities  arising under the
                Securities  Act of 1933 may be permitted to directors,  officers
                or persons  controlling the registrant pursuant to the foregoing
                provisions,  the registrant has been advised that in the opinion
                of the Securities and Exchange  Commission such  indemnification
                is against  such public  policy as  expressed in the Act and is,
                therefore,   unenforceable.  In  the  event  that  a  claim  for
                indemnification against such liabilities (other than the payment
                by the  registrant  of expanses  incurred or paid by a director,
                officer  or   controlling   person  of  the  registrant  in  the
                successful  defense  if  any  action,  suit  or  proceeding)  is
                asserted  by such  director,  officer or  controlling  person in
                connection with the securities being registered,  the registrant
                will,  unless in the  opinion of its counsel the matter has been
                settled  by  controlling   precedent,   submit  to  a  court  of
                appropriate    jurisdiction    the    question    whether   such
                indemnification  by it is against  public policy as expressed in
                the Act and will be governed by the final  adjudication  of such
                issue.


                                      II-3



                                   SIGNATURES

        Pursuant  to  the  requirements  of the  Securities  Act  of  1933,  the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the  City of New  York,  State of New  York,  on the 16th day of
November, 2004.

                             BIOENVISION, INC.

                             By /s/ Christopher B. Wood
                             --------------------------
                             Christopher B. Wood, Chairman of the
                             Board and Chief Executive Officer


In  accordance  with  the  requirements  of the  Securities  Act of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated.


Signature                      Title                         Date
---------                      -----                         ----

/s/ Christopher B. Wood        Chairman and Chief Executive  November 16th, 2004
-----------------------        Officer and Director
Christopher B. Wood            (Principal Executive Officer)

* David P. Luci                Chief Financial Officer,      November 16th, 2004
                               General Counsel (Principal
                               Financial and Accounting
                               Officer)

* Thomas S. Nelson, C.A.         Director                    November 16th, 2004

* Michael Kauffman               Director                    November 16th, 2004

* Andrew N. Schiff               Director                    November 16th, 2004


* By  /s/ Christopher B. Wood                                November 16th, 2004
      -----------------------
          Christopher B. Wood
          Attorney-in-fact


                                      II-4



                                  EXHIBIT INDEX


    Exhibit
    Number                                   Description
    -------                                  -----------
         5.1                  Opinion of Paul, Hastings, Janofsky & Walker, LLP

        23.1                  Consent of Grant Thornton LLP

        23.2                  Consent of Paul, Hastings, Janofsky & Walker LLP
                              (included in Exhibit 5.1)


                                      II-5